-:-:- This month's edition of the Tax and Business Alert Click Here -:-:- Monthly Article - August 2004 Employers, Veterans and Retirement Plans With thousands of Americans serving in the U.S. military reserves and National Guard units being called to active duty for extended periods of time, many questions arise over both employee rights and employer obligations. The Uniformed Services and Reemployment Rights Act (USERRA) protects employment and benefit rights of Americans who are absent from civilian jobs to serve in the uniformed military branches. Some of the issues that arise concerning the reemployment of veterans and restoration of retirement plans are: What is the basic rule for employers reemploying veterans? Employers must fund pension benefits that a reemployed participant did not receive due to qualifying military service. How does that work for profit sharing pension plans? Employers must make the non-elective employer contributions that would have been made during the military service period. How is compensation determined for this purpose? To calculate the makeup contributions and allocations due, assume the rehired employee earned compensation at the same rate they would have received during the military service period. How long do employers have to make these makeup contributions? Employers do not have to begin the makeup contributions until after the veteran returns to civilian employment with the same employer; employers may fund makeup contributions over a period of three times the military service period, not to exceed five years. What about employer matching contributions? If matching contributions are required because of employee elective contributions, the employer match must occur as soon as the rehired veteran pays in missed elective contributions. Are there special rules for forfeitures or lost earnings? A rehired employee is not entitled to missed allocations for any forfeitures that occurred during the military service period, nor lost earnings on makeup contributions. Are there rules for contributory defined benefit plans? A rehired veteran must be permitted to make up missed contributions required to earn a benefit accrual for the military service period. For questions specific to the effects of USERRA on retirement plans, call the IRS at (877) 829-5500 or Karen Meldahl, CFP, at 847-367-4448. Dam Snell and Taveirne (DST), Ltd. Monthly Articles -:-:- Quickbooks -:-:- 2003 Personal Tax Changes -:-:- Tax Act-Business Highlights -:-:- -:-:- Year-End Planning Tips -:-:- Organize Your Office -:-:- Types of Statements -:-:- -:-:- Business Planning -:-:- Strategy-Based Business Model -:-:- Retirement Plans -:-:- -:-:- Tax Planning -:-:- Retirement Planning -:-:- Credit Cards in Quickbooks? -:-:- -:-:- Tax and Business Alert! -:-:- Print this article - Back to top of page