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This Act was especially passed for military reservists who were called to active military duty and in order to benefit from it, they had to be called for active duty for at least 180 days or for an indefinite period of time. As a result, military reservists could receive payments from their IRA accounts, 401(k) plan and 403(b) tax-sheltered annuities without having to taxes for early distribution.
This also allows the military reservists to re-contribute part or all of the early distributions to an IRA and this has to be done within 2 years after the ending of the active duty period.
The US government has just signed the Heroes Earnings Assistance and Relief Tax Act of 2008 into law. In addition to giving tax breaks and incentives to military personnel, the law also has an impact on employers’ treatment of differential wage payments and their retirement plans.
The Pension Protection Act of 2006 was set to expire on December 31, 2007 and as a result the Heroes Earning Assistance and Relief Tax Act was introduced so that military personnel can continue getting the benefits.
In addition, different states across the US have also introduced their own tax breaks for military personnel and this means that many states allow personnel to take early distribution without incurring states taxes. This is a plus point for all military personnel who are retiring early. They get tax breaks not just at federal level but also at state level.
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Federal agencies that are undergoing significant restructuring, reshaping, downsizing, transfer of function or reorganization to temporarily lower the age and service requirements to increase the number of employees who are eligible for retirement can now do so under Voluntary Early Retirement Authority, also known as VERA. 
