Year-End Employee Benefits and Executive Compensation Checklist

Employers sponsoring retirement plans, welfare plans and deferred compensation arrangements should be mindful of certain actions which must take place by December 31 of this year. Although few of these action items entail major undertakings, employers should review their plans and policies to ensure that appropriate action is taken to comply with the laws or to take advantage of new rules that can ease administrative burdens.

• Automatic Cash Out Procedures:
Most qualified retirement plans automatically "cash out" a terminated participant's account if the participant has not provided distribution directions and if the amount is less than $5,000. The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) amended the Internal Revenue Code of 1986 (the "Code"), by adding Code §401(a)(31)(B), requiring the plan administrator to transfer the mandatory cash out distribution to an individual retirement account if the mandatory distribution amount is greater