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WASHINGTON, DC-Two real estate industry organizations are lauding provisions in the new pension legislation that was signed into law yesterday. The Real Estate Roundtable here notes that the law eliminates a 25% pension asset ceiling for government, foreign and other non-ERISA employee benefit plans.

Before the enactment of the new pension law, if 25% of a fund’s assets came from pension plans, that fund would have to become a fiduciary, which would have specific obligations and limitations under ERISA. Under the new law, government, foreign and other non-ERISA employee benefit plans are exempt from ERISA’s 25 percent pension asset ceiling. This didn’t affect real estate operating companies and venture capital operating companies, the Roundtable said, but it did for secondary funds that were not operating companies. “As these secondary funds seek to increase their investment in real estate for ERISA and non-ERISA plans, the 25% ceiling has been a hindrance,” it said in a briefing on the subject. “By exempting these employee benefit plans from the definition of “benefit plan investor,” the legislation will expand the number of private pension plans who can diversify their investments more broadly into other funds—including real estate—without fear of ERISA restrictions. This will have a positive effect on real estate capital investment flows.”

Another provision highlighted by the Appraisal Institute is Internal Revenue Service appraisal reforms relating to tax deductions given for non-cash charitable contributions. They include a requirement that professionally designated appraisers perform appraisals for conservation easements and historic preservation easements. “Congress has raised the bar for standards in this industry,” a spokesperson for the Institute tells GlobeSt.com. “We have been working for a long time to accomplish this.”

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