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Time to Move Away from the PPA Baseline
Lori Lucas, of Callan, via Defined Contribution Institutional Investment Association [DCIIA] Link to more items from this source
[Opinion]
May 18, 2014
"[T]he downside to the [Pension Protection Act of 2006 (PPA)] is what Harvard Professor Brigitte Madrian calls the Baseline PPA Effect. This terms relates specifically to the non-discrimination testing safe harbor requiring that plans implement auto features with a contribution rate of 3% of pay, and with contributions automatically escalating over time to 6% of pay. However, these requirements apply only if the plan seeks to qualify for the non-discrimination testing safe harbor -- which few plans do. So if they aren't seeking safe harbor, then why adhere to these defaults?"

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