Among the many changes in the SECURE 2.0 legislation are a number of provisions allowing participants to access their retirement funds without incurring a penalty excise tax. These provisions are discussed below.
Withdrawals for Terminal Illness or Domestic Abuse. Effective on the date of enactment (December 29, 2022), SECURE 2.0 authorizes a plan to permit a participant diagnosed with a…
Among the many provisions of the SECURE 2.0 legislation are a number of provisions designed to encourage employees to participate in and contribute to their employer provided retirement plan. Still other provisions provide more access to money in such plans under certain circumstances. This article will address provisions that encourage participation. A subsequent article will cover accessing retirement plan money.…
Among the many changes to retirement plans made by the SECURE 2.0 legislation are changes meant to encourage more employers to adopt retirement plans for their employees. Additionally there are provisions simplifying many rules of operating plans and provisions encouraging employees to participate and save for retirement. This article will discuss a couple of provisions encouraging employers to adopt plans.…
A provision of the SECURE 2.0 legislation will affect an employer’s decision as to whether to adopt a 401(k) plan or 403(b) plan. The provision requires most 401(k) plans and 403(b) plans (Plans) adopted after the date of enactment of SECURE 2.0 (December 29, 2022) to automatically enroll eligible employees with an automatic contribution that will automatically escalate each year…
Of the over 90 provisions contained in the SECURE 2.0 legislation is a handful that only apply to retirement plans of nonprofit, tax exempt organizations (EOs). One is specific to EOs sponsoring 457(b) plans and others involve 403(b) plans. These provisions are discussed below.
457 RMD Amendment Deadline Extended. Late last year, I wrote on how, unlike 401(k) or 403(b)…
By now you probably know that the $1.7 billion Budget Reconciliation Act of 2023 (Act) that kept the Federal government funded was enacted on December 29, 2022. You are probably also aware that the legislation known as SECURE 2.0 was part of the legislation. However, you might not know that there are close to a hundred provisions affecting retirement plans…
An ERISA class action suit recently filed in the United States District Court for the District of Arizona maintains the plan administrator breached its fiduciary duties by allowing participants to be charged unreasonable recordkeeping fees for years. Hagins et al v. Knight-Swift Transportation Holdings, Inc., 2022 CV 01835-MTM, October 26, 2022. The case demonstrates how plan fiduciaries have a duty…
A new survey conducted by Newport Group and PLANSPONSOR shows a dramatic increase in the use of nonqualified deferred compensation (NQDC) plans to retain and attract executives. Of 350 organizations offering NQDC plans, 42% said that was the reason for offering them. This is up from 26% in the 2020 survey. The survey also found a dramatic increase in the…
The deadlines for amending many retirement plans for recent changes in the law under the CARES Act and SECURE Act have been extended to December 31, 2025 (governmental qualified or 457(b) plans or a 403(b) plan for public school employees deadline is generally within 90 days after the legislative body with authority to amend the plan closes the third regular…
On September 29, the House of Representatives passed the Mental Health Matters Act (Act) which included the provisions of another bill previously introduced, the Employee and Retiree Access to Justice Act (ERAJA). While the Act principally deals with health plans and expanding access to mental health and substance abuse services, ERAJA amends ERISA in two important ways that will lead…
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