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On the regulatory front
Rule changes and
legislation will affect benefits and many workplace-related
issues in 2005. Here are some key dates to watch:
Virginia Business
February
2005
Jan
1: Benefit extension for veterans
Some portions of the Veterans Benefits Improvement Act
of 2004 took effect. Employers must now provide COBRA-related
health-care coverage for up to 24 months — instead
of 18 months — for employees called to active
military duty. The change is expected to benefit military
reservists and members of the National Guard.
March
28: 401(k) rollover rules for departing workers
New rules from the Internal Revenue Service provide
guidance on what employers should do about the automatic
rollover of funds left by departing workers in 401(k)
plans. They stipulate that any mandatory distributions
of between $1,000 and $5,000 from a qualified defined
contribution plan be rolled over to an individual retirement
account (IRA) unless the employee makes another election.
Before the change, it was up to workers to shift their
money to other tax-deferred accounts.
July
1: Treatment of stock options
Publicly traded companies must begin treating stock
options as normal business expenses. Under the rule
change by the Financial Accounting Standards Board,
private companies that grant options to employees have
until Jan. 1, 2006 to comply.
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