The Small Business Job Protection Act of 19961 (the "Act"), which was signed by the President on August 20, 1996, eliminates some of the complexities and restrictions involved in maintaining and administering 401(k) and other qualified plans. This should encourage employers to establish new qualified plans and continue to maintain existing plans, as well as enable highly compensated individuals to utilize more fully the benefits associated with these plans.
Although some of the provisions affecting the operation of qualified plans have effective dates deferred until 1998 and 1999, many employee benefit provisions of the Act are effective beginning January 1, 1997. Thus, it is important that employers review their benefit programs at an early date in order to determine the extent to which the new law may have an impact on their programs.
