Even if your company doesn’t currently employ a military reservist, the new Heroes Act may affect your organization.

Signed into law in June, the Heroes Act affects 401(k)s, flexible spending accounts (FSAs) and wages.
The law waives the 10% tax on early distributions for 401(k) and similar plans for qualified reservists who are called to duty.

It also requires 401(k) plans to provide the survivors of a participant who dies in the line of duty with the same disbursement benefits as an active employee who dies.

If a reservist called to active duty has an FSA, the feds now allow you to pay the unused balance tax-free. This prevents the employee from forfeiting the money. Lastly, firms with fewer than 50 employees that pay makeup wages to reservists get a tax credit of up to $4,000 per reservist.

Even if you don’t employ a reservist, your benefit plan documents must be compliant with the law.
Plan document amendments must be adopted no later than the last day of your 2010 plan year.