WRERAWorker, Retiree, and Employer Recovery Act of 2008 (US)
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Relaxed required minimum distributions (RMDs): WRERA waives the calendar-year 2009 RMD requirement under Sec.
Shortly after WRERA passed, the IRS issued Notice 2009-9, (4) which provided guidance on how to complete box 11 (for RMDs) on the 2008 Form 5498, IRA Contribution Information.
Funding relief: WRERA provided funding relief by easing the requirements to qualify for PPA's transition rules related to the full funding requirement.
WRERA relaxed this requirement by (1) allowing a plan to calculate its funding shortfall contribution based on the difference between the transition target for the year and its actual funding level and (2) allowing the plan to use the transition target in subsequent years even if the plan missed the prior year's funding target.
For plans that are less than 60% funded, WRERA provided relief from the requirement that benefit accruals be suspended for the plan years that began between October 1, 2008, and September 30, 2009.
WRERA makes this feature mandatory in retirement plans for plan years beginning after December 31, 2009.
WRERA carves out an exception to the $100,000 and married filing separately limitations for rollovers from designated Roth accounts.
WRERA added a new subparagraph (H), titled "Temporary Waiver of Minimum Required Distribution." This new provision waives the distribution that would otherwise be required by providing that the distribution rules "shall not apply for calendar year 2009."
Another significant development under WRERA is the direction to plan sponsors to allow nonspouse beneficiaries to roll over plan benefits into an individual retirement account ("IRA") by 2010.
Under WRERA, plans now must offer a nonspouse the option to direct rollover to an inherited IRA.
A final technical fix under WRERA allows for qualified rollovers from existing Roth accounts (such as a Roth 401(k)) to a Roth IRA.
Planning Point: WRERA 2008 provided that RMDs from IRAs for calendar year 2009 are waived.