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Links Of Interest |
New law presents opportunity for contributions to Roth IRA A new law passed in December allows eligible active and former airline employees to contribute the amount of certain bankruptcy-related payments to a Roth IRA. A Roth IRA is an individual retirement account that allows contributions on an after-tax basis. The earnings on a Roth IRA are generally tax-free when you take a distribution in accordance with the Roth IRA rules. A traditional IRA only allows for before-tax contributions. Eligible employees and retirees must have been a participant in the airline’s defined benefit plan, which was terminated or became subject to special airline funding rules under the Pension Protection Act of 2006. Income and funding restrictions, which normally apply to Roth IRA contributions, will not apply under this special provision for those eligible. A letter from Rob Kight, v.p.-Compensation, Benefits and Services, has been mailed to the homes of all employees and retirees eligible to make contributions to a Roth IRA under the provisions of Section 125 of the Worker, Retiree and Employer Recovery Act of 2008. While no actions are required as a result of this legislation, it may present a favorable tax opportunity, and eligible employees and retirees may wish to consult their financial or tax advisor. The mailing also includes a form with personalized information, including the amount the employee/retiree received as a bankruptcy-related payment that is eligible for the Roth contribution. Read the Rob Kight
letter to eligible employees.
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