Updated August 24, 2023 In addition to compliance testing, which compares benefits received by the highly compensated and non-highly compensated employees, qualified retirement plans are subject to a top-heavy test that checks whether account balances of ‘Key Employees’ make up…
SECURE 2.0 Aims to Simplify and Eliminate Certain Participant Notifications
Updated August 24, 2023 SECURE 2.0 introduced a number of provisions that seek to lessen the administrative burden for employers sponsoring retirement savings programs. Among them, several provisions impacting required plan notices and disclosures. The Department of Labor…
SECURE 2.0: Updated Paper Statement Requirements Allow Room for Electronic Delivery
Updated August 24, 2023 Another provision of SECURE 2.0, in Section 338, has modified the requirement to provide paper account statements effective with plan years beginning after December 31, 2025. Before SECURE 2.0, electronic delivery of these statements was…
SECURE 2.0: Long-term, Part-Time Employee Rules Extended to 403(b) Plans
Updated August 24, 2023 SECURE 2.0 requires 403(b) plans subject to ERISA to conform to the LTPT rules (Read a thorough discussion of the LTPT rules). Certain deferral-only 403(b) plans, church plans, and plans sponsored by governmental entities are…
SECURE 2.0: New Long-term, Part-Time Employee Rules Get a Refresh
Updated December 1, 2023 The 2019 SECURE Act (SECURE 1.0) and the SECURE 2.0 Act of 2022 (SECURE 2.0) have introduced significant changes to retirement plan rules; they aim to set millions of Americans on a path to a more…
SECURE 2.0 Changes Family Attribution Rules
Updated August 24, 2023 When applying retirement plan compliance requirements, certain related employers have long been required to be treated as a single employer due to the controlled group or affiliated service group aggregation rules (you can learn more about…
SECURE 2.0: Expansion of Self-Correction Options
Updated August 24, 2023 When a retirement savings program is operated inconsistently with the language of the plan document, called plan terms, it can put its tax-qualified status at risk leading to loss of deduction for past contributions, back…
SECURE 2.0 Changes to Required Minimum Distribution Rules (RMDs)
Updated August 24, 2023 The Tax Code requires participants in workplace retirement savings plans to begin withdrawing a minimum amount, a required minimum distribution (RMD), annually by a specific date triggered by age. A retirement plan may force those withdrawals…
SECURE 2.0 Expands Plan Withdrawal Options
Updated August 24, 2023 SECURE 2.0 created several optional distribution types providing employees with easier access to workplace savings accounts when faced with the unexpected. These distributions are penalty-free, meaning the 10% excise tax on withdrawals taken before age 59…
SECURE 2.0 Gives Employers an Option to Raise Force-out Threshold to $7,000
Updated August 24, 2023 Increase in ‘Force Out’ Threshold from $5,000 to $7,000 for Former Employees Maintaining former employee accounts with small balances has long been complicated and costly. While optional, many plans already include an automatic cashout provision for…