Summary of Federal Laws

 

Employment

 

Miscellaneous Employment Laws

 

Small Business Job Protection Act of 1996

 

Pub. L. No. 104-188, 110 Stat. 1755 (1996)

 

This law made a number of changes to the Internal Revenue Code, the Fair Labor Standards Act of 1938 and other portions of the U.S. Code.  Of special interest in the pension area are the minimum distribution rules.  Minimum distributions from tax-qualified retirement plans will not be required for workers over age 70½.  Under the new rule, which commences in 1997, distributions will not need to be made until April 1 of the year following the later of  the year the employee attains age 70½, or the year the employee retires.  Five-percent owners and IRA holders are still subject to the minimum distribution rule, that is, they will need to start receiving distributions by April 1 of the year following attaining age 70½ even if they are still working.  Benefits for those workers still working after age 70½ must be actuarially adjusted for those who are participating in defined benefit plans.  See I.R.C. § 401(a)(9). 

 

The IRS issued guidance on December 22, 1997, addressing the amendments to the minimum distribution requirements.  See Notice 97-75, 1997-51 I.R.B. 18.