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The U.S. Master Pension Guide reflects the latest regulations, rulings and cases for qualified retirement plans, surveying the different type of plans from which an employer may choose, and describing the procedures for obtaining plan qualification.

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CCH® PENSION AND BENEFITS — 7/3/08

President signs military tax relief bill

On June 17, 2008, President Bush signed the Heroes Earnings Assistance and Relief Tax (HEART) Act of 2008 (H.R. 6081, P. L. No. 110-245). The Act, which was passed by the House on May 20 and the Senate on May 22, provides tax relief to members of the armed services, and contains a number of provisions affecting pensions and employee benefits of military personnel. Relevant portions of H.R. 6081 and relevant portions of a technical explanation of the legislation prepared by the Joint Committee on Taxation are at ¶29,153 of the CCH Pension Plan Guide.

The signing was hailed by Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA). The Act “helps our fighting forces and our veterans purchase their own homes, save for their retirements, and put their kids through college,” said Baucus, adding that, “it helps businesses keep reservists on the payroll while they are overseas.”

Pension and benefit provisions

The HEART Act makes permanent the rules allowing active duty reservists to make penalty-free withdrawals from retirement plans and IRAs, which had expired at the end of 2007. The Act also allows survivors of soldiers killed in combat to contribute military death gratuities to Roth IRAs and Coverdell education savings accounts.

Under the Act, in order to retain tax-qualified status, a retirement plan must now provide that the survivors of a participant who dies while performing qualified military service are entitled to any additional benefits that would be provided under the plan had the participant returned and then terminated employment on account of death. For benefit accrual purposes, an employer who sponsors a retirement plan may treat a participant in the plan who dies or becomes disabled while performing qualified military service as if the individual had resumed employment on the day preceding death or disability and terminated employment on the actual date of death or disability.

In addition, the mental health parity requirements under the Internal Revenue Code and ERISA that expired on December 31, 2007 are extended through December 31, 2008.