Proposed Rules for USERRA
Rev. 10/07/04, E-mail Alert 2004-20

The DOL recently issued proposed rules for implementing the Uniformed Services Employment and Reemployment Rights Act (USERRA). Included is a time frame for employers to use regarding the deposit of retirement plan contributions due to returning servicemen/women. Public comments may be made until November 19, 2004. The effective date will be 30 days after the final rules are published in the Federal Register.

The regulations applied to many facets of employment but there were several items critical to the operation of retirement plans. The most significant was the deadline for depositing employer contributions (not matching amounts) for a reemployed service member. The contributions must be made within 30 days of reemployment (or as soon as practical if this is not possible). This may be difficult for plan sponsors to accomplish because they will need to determine the applicable compensation, calculate the amount and contribute it to the plan.

Reservists who received a distribution will have the option to repay that amount to the plan. Note that defined benefit plan participants will need to adjust this amount with the plan rate of interest for the applicable time period of leave. No adjustment is necessary for defined contribution repayment amounts. It appears that the reinstated accounts will include forfeitures.

Click here for a link to the Proposed Regulations in the Federal Register of September 20, 2004. Pension Benefits are presented on pages 56278-56280.
FAQs on Pension Benefits appear on pages 56298 - 56300.

Bill Grossman, QPA