By Jeff Carlson, Washington Staff Writer

The House and Senate on December 10 and December 11 respectively, approved the Worker, Retiree and Employer Recovery Act of 2008 by unanimous consent. Passage of the measure came as House leadership dropped objectionable tax breaks advanced by Senate Democrats, forcing the Senate to approve a clean bill.

Of special concern to older taxpayers, the Act suspends--for 2009 only--the requirement that individuals over 70 and 1/2 take required minimum distributions from their retirement plans such as IRAs and 401(k)s.

"This means that people will not be required to deplete their savings at a time when many accounts' values have already been ravaged by declines in the stock market," noted Mark Luscombe, JD, CPA, CCH principal federal tax analyst.

The Act did not address required minimum distributions for 2008. The CCH Briefing notes that the Treasury Department is considering some relief but has said it has "no timeframe" for any announcements.

Another measure gives generally healthy multi-employer pension plans that were hurt by the decline in the stock market the ability to avoid drastic contribution increases and cutbacks in worker benefits, by easing funding requirements that have become difficult to meet as a result of the market downturn and also making a number of technical corrections to previous legislation. In addition, the Act makes it clear that rollovers of a dead person's interest in a qualified plan to a non-spouse beneficiary is mandatory; the IRS had interpreted a provision in prior law as non-binding on plan administrators.

"The Act leaves some issues unaddressed, including a proposal made by President-elect Obama during the campaign that would allow greater access to retirement savings without penalty to help taxpayers cope with difficult economic times," Luscombe noted. "But we're looking forward to much more legislation in 2009."