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Last month we provided an analysis of the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA). The Worker, Retiree, and Employer Recovery Act of 2008: Limited Relief and Technical Guidance for Qualified Retirement Plans provides a summary of the key provisions:

On December 23, 2008, President George W. Bush signed the Worker, Retiree, and Employer Recovery Act of 2008 (the Act). The Act makes a number of technical corrections to the Pension Protection Act of 2006 (PPA) and amends the Employee Retirement Income Security Act of 1974 (ERISA), as well as the Internal Revenue Code (the Code). The Act also provides temporary loosening of pension funding and distribution requirements in response to the broad economic downturn and associated decline in the value of most retirement plan investments. As employers prepare plan amendments for PPA compliance during 2009, these changes need to be considered. The following is a summary of the key provisions of the Act.

  • Defined Contribution Plans – General Rules

  • Defined Benefit Pension Plans – General Rules

    • Lump Sum Payments
    • Cash Balance Vesting
    • Preservation of Capital Rule Clarified
    • Extension of PFEA Amendment Date
    • Accrual Freeze Requirements

  • Defined Benefit Pension PLANS – Funding RULES

    • Funding Target Transition Relief
    • At-Risk Plans
    • Asset Smoothing
    • Target Normal Cost (Plan Expenses)

  • Other Significant Provisions Affecting Both DB And Dc Plans

    • Non-Spouse Rollovers (Non-Spouse Rollover Rules)
    • Clarification of Combined Deduction Limit for Defined Benefit and Defined Contribution Plans

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