Worker, Retiree, and Employer Recovery Act of 2008
Enacted December 23, 2008
- Suspends RMDs (Required Minimum Distributions) from qualified plans and individual retirement accounts for 2009.
- The excise tax is waived on all 2009 RMD underpayment distributions.
- Clarifies that all plan types must permit rollovers out of the plan for non-spouse beneficiaries and provide notice of the distribution.
- Extends the current $3,000 exclusion for health insurance premiums for retired public safety officers to self-funded arrangements.
- Plans that fall below the target funding percentage (92 percent for 2008 and 94 percent for 2009) will be required to make subsequent contributions up to the specified funding percentage for that year instead of the 100 percent amount required by the Pension Protection Act.
- Clarifies the use of smoothing to allow the recognition of unexpected asset gains and losses over 24-months.
- Relief for multi-employer plans, by allowing plan sponsors to elect to temporarily freeze at the funding status held in the previous plan year.
- Relief of mandatory accrual of pension benefits.
- Increase in the failure-to-file penalty fees for partnerships and S-Corps.
Note: This is not a complete list of all the provisions in the Act. Please give us a call to discuss an item in greater depth or to inquire about an item not on this list.
Disclaimer: This document represents a general overview of recent tax developments and should not be relied upon without an independent, professional analysis of how any of these provisions may apply to your specific situation. Any tax information contained in the body of this narrative was not intended or written to be used, and cannot be used, by the recipient for the purposes of avoiding penalties that may be imposed under the Internal Revenue Code or provisions of applicable state or local law.