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Congress Passes Worker, Retiree and Employer Recovery Act of 2008

On December 11, 2008, Congress passed the Worker, Retiree, and Employer Recovery Act of 2008 (H.R. 7327). The President has stated that he will sign the bill when it reaches his desk.

The much anticipated legislation provides that 2009 RMDs won’t be required from IRAs and employer defined contribution plans. (2008 RMDs, however, must be taken.)

The Act also contains a number of technical corrections to the Pension Protection Act, including the following:

  • Direct rollovers from Roth 401(k) and Roth 403(b) accounts are NOT subject to any income limit
  • Beginning with the 2010 plan year, employer plans MUST offer a direct rollover option to nonspouse beneficiaries
  • Pension plan funding rules are eased, providing relief to many employers who have seen a dramatic reduction recently in the value of their plans’ assets

The text of the bill can be found here.

The Joint Committee on Taxation explanation can be found here.

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