On December 11, 2008, the House and Senate passed The Worker, Retiree and Employer Recovery Act of 2008 (HR 7327), which will become law when signed by the President. [For a complete copy of the bill, click on the title of this post to be taken to the site.]
This bill includes short term provisions to help individuals and plan sponsors deal with the market downturn, as well as the PPA technical corrections package.
A few of the highlights of the bill are:
*Effective for plans beginning after December 31, 2009, rollovers by non-spouse beneficiaries are generally subject to the same rules as eligible rollovers. This means plans are required to provide a direct rollover option for non-spousal beneficiaries and must provide an IRC Sec 402(f) notice to the non-spousal beneficiaries.
*The requirement that gap period income be distributed on excess deferrals is eliminated. Thus, gap period income is no longer required on excess contributions, excess aggregate contributions, and excess deferrals distributed to satisfy IRS Sec 401(k)/(m) or 402(g).
* Effective for plan years beginning after 2008, defined benefit plans sponsored by small employers (100 or fewer employees) can provide a fixed 5.5% interest rate for determining maximum lump sum benefits under IRC Sec 415.
* The minimum required distributions otherwise due for 2009 under IRC Sec 401(a)(9) would be waived for qualified retirement plans, IRC Sec 403(a) and IRC Sec 403(b) plans, governmental IRC Sec 457(b) plans and IRA's.
As these are just a few highlights of the entire bill, we encourage you to call our office if you have any questions.
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