Buzz Archive:
PE Buzz: Pension Protection Act of 2006

by Joseph W. Bartlett, Founder of VC Experts.com, 5/17/2007

As indicated in Book 10 of The Encyclopedia of Private Equity and Venture Capital, the Pension Protection Act of 2006 liberalized the "Significant Participation" text for funds with limited partner commitments from investors subject to the Employee Retirement Income Security Act of 1974 ("ERISA").

For purposes of the 25% test, investors which had been counted in that census because they looked like ERISA funds ... i.e., State employee benefit plans and off-shore employee benefit plans ... are now no longer counted. The only investors counted towards the Significant Participation test are funds directly regulated by ERISA. Learn more about the revised a 'look through' proscription which impacts, particularly, fund of funds investors.