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Today, the House of Representatives passed the $1.9 trillion American Rescue Plan Act of 2021 (the “ARPA”). The ARPA has already been approved by the Senate and is expected to be quickly signed into law by President Biden. This client alert addresses Title IX, Subtitle H of the new legislation, which includes significant pension reforms for multiemployer and single-employer pension plans, and expands the number of covered employees for the limitation on the deductibility of executive compensation under Section 162(m) of the Tax Code.
Multiemployer Pension Reforms
Background
The multiemployer pension system in the United States is currently in crisis, with over 100 multiemployer pension plans, covering more than one million participants in total, projected to become insolvent within the next 10 to 20 years. The largest and most significant of these plans, the Central States, Southeast and Southwest Areas Pension Fund
IR-2021-57, March 16, 2021 The Internal Revenue Service today reminded taxpayers about the rules for required minimum distributions (RMDs) from retirement accounts.
On March 10, 2021, the House of Representatives passed the version of the
American Rescue Plan Act (H.R. 1319, the “Act”) previously passed by the Senate on March 6. President Biden is expected to sign the legislation on Friday. The Act is intended to, among other things, provide financial support to families struggling because of the pandemic, including a third round of stimulus checks for individuals (up to certain income limits), temporary COBRA and Affordable Care Act (“ACA”) subsidies intended to help people maintain health insurance coverage during the pandemic, and funding for COVID-19 vaccines and testing. The Act also includes a number of other tax and retirement provisions, including extended funding stabilization for single-employer pension plans, financial assistance for certain multiemployer pension plans, and changes to the executive compensation rules. Below, we summarize the key health, tax, and retirement provisions in the Act.