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Archived News Release--Caution:
information may be out of date.
For more information call: (202) 219-5573
Working Americans who leave their jobs temporarily for military service
can now be sure their retirement plans won't suffer during their absence.
The law increasing the national minimum wage also amended the Internal
Revenue Code to allow reemployed veterans to make or receive contributions to
their pension and retirement plans for the period in which they were in
military service. The amount of these payments, known as make-up contributions,
can equal the amount that would have been contributed had the veteran never
left civilian employment.
Before these changes to the tax code, the Internal Revenue Service set
annual monetary limits on contributions and benefits allowed under certain
retirement plans. These limits posed a potential conflict with provisions of
the Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994.
USERRA requires that a veteran returning to civilian employment after a
period of active duty or required training is entitled to the restoration of
pension, profit sharing and similar benefits that would have accrued but for
the employee's absence due to military service. USERRA also provides that
employers reemploying returning veterans are liable for funding their share, if
any, to the veterans' retirement plans.
Employers and veterans seeking more information about rights and
responsibilities under USERRA should contact the state director of the
Veterans' Employment and Training Service listed under U.S. Department of Labor
in the government section of the telephone book.
Veterans may also contact their employers, plan administrators or the
Internal Revenue Service for information regarding their rights to pension,
profit sharing and other retirement benefits. Employers seeking further
information regarding the new provisions of the Internal Revenue Code are
encouraged to contact the Internal Revenue Service.
Archived News Release--Caution:
information may be out of date.
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