On December 23, former President Bush signed into law the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA 2008). WRERA 2008 provides a number of relief provisions for qualified plan sponsors and their beneficiaries and individual retirement arrangements.

Required Minimum Distribution Relief for 2009

WRERA 2008 includes provisions that eliminate Required Minimum Distributions for distribution year 2009 for IRA’s, qualified employer defined contribution plans (including 401(k) plans, profit sharing plans and money purchase pension plans), 403(a) and 403(b) plans and 457(b) plans. You will not have to add any skipped payout to what you have to withdraw in 2010.

Roth-to-Roth Rollovers

The $100,000 adjusted gross income limitation for IRA roll-overs does not apply after 2009. WRERA 2008 provides that a rollover from a Roth IRA or a designated Roth account to a Roth IRA is not subject to the adjusted gross income limitation and is not subject to tax.

Rollovers by Non-spouse Beneficiaries

Non-spouse beneficiaries can now roll over inherited eligible retirement plans to an IRA created to receive the inherited eligible retirement plan in a direct trustee-to-trustee transfer. After 2009, a rollover by a non-spouse beneficiary is generally treated like any other eligible rollover.

Written by Casey Jones