COLLECTED WISDOM™ on Compliance and Regulatory Related Issues

This page gathers relevant information for 401k plan managers, sponsors, administrators, recordkeepers and others with plan fiduciary and administrative responsibilities. It covers many aspects of compliance and regulatory related issues.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

More Discretion, More Documentation: Recovering Overpayments Under Secure 2.0

Under SECURE 2.0, plan sponsors can decide whether to recoup inadvertent benefit overpayments but are no longer required to do so. However, they must document and monitor their decision-making process to fulfill fiduciary duties. Maintaining a consistent process for handling and recording all overpayment decisions helps ensure proper oversight and simplifies audits.

Source: Brickergraydon.com, April 2025

2026 401k Contribution Limit on Track for $1,000 Increase: Milliman

The maximum 401k contribution limit, currently $23,500 for 2025, is projected to increase by $1,000 to $24,500 in 2026, according to Milliman's latest IRS limits forecast. This forecast, based on Consumer Price Index data, predicts the annual adjustment that the IRS typically announces in late fall.

Source: 401kspecialistmag.com, April 2025

Report Raises Eyebrows About Claims of Rampant "Red Flags" in Retirement Plans

An expert criticized a recent analysis highlighting extensive ERISA noncompliance as "scaremongering." In January, the New York-based consulting firm Abernathy Daley released a report claiming that approximately 84% of U.S. retirement plans exhibited at least one "red flag" indicative of a potential violation of ERISA. However, some industry professionals have disputed the firm's assertions regarding the prevalence of compliance risks.

Source: Hrdive.com, April 2025

The DOL's Lost and Found Database Is Live

The DOL has developed a database as part of SECURE 2.0 to assist in locating missing retirement plan participants and beneficiaries. This initiative aims to address the ongoing issue of missing participants, which is a key focus for both the DOL and the IRS. While participation in the database is voluntary for plan sponsors, it can serve as additional evidence that they are fulfilling their fiduciary duty to locate eligible participants for benefits.

Source: Brickergraydon.com, April 2025

IRA Bankruptcy Exemption Increases

Effective April 1, 2025, the maximum bankruptcy exemption for IRAs will increase from $1,512,350 to $1,711,975. This amount will be adjusted for cost-of-living increases and reflects an increase from the original limit of $1,000,000 set by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Source: Ascensus.com, April 2025

User's Guide to SECURE 2.0

Navigating SECURE 2.0 is challenging due to its complexity and lack of a table of contents. To help employers and plan sponsors understand its implications, this guide provides a summary of SECURE 2.0 provisions organized thematically, including distinctions between changes for defined contribution and defined benefit plans. The six accompanying tables outline statutory changes, their effective dates, and whether changes are mandatory or optional for employers. The guide also includes observations from Mercer regarding potential implementation challenges and notes drafting errors that Congress plans to correct.

Source: Mercer.com, April 2025

What Documents Do I Need for a 401k Audit?

Preparing for a 401k audit can raise questions about required documentation. A sample checklist can help guide you, but note that your auditor will tailor requests based on your specific retirement plan. While the checklist might appear extensive, many items will likely be supplied by your plan's third-party administrator or recordkeeper. To facilitate the audit, it's recommended to provide your auditor with online view-only access to the plan. Here is a sample checklist.

Source: Belfint.com, April 2025

Time Is Running Out to Utilize Forfeiture Relief (And How to Avoid Lawsuits)

Lawsuits regarding the misuse of forfeitures in retirement plans are ongoing, with outcomes varying. However, individuals and advisors can proactively implement strategies to avoid these lawsuits. Additionally, there is a limited opportunity to benefit from IRS relief related to built-up forfeitures that haven't been utilized in prior years, with a deadline set for the end of 2025. This article outlines ways to take advantage of this IRS forfeiture relief while also providing guidance on preventing potential lawsuits. By helping clients stay compliant and avoid legal issues, advisors can position themselves as valuable resources.

Source: Penchecks.com, April 2025

Cheats Sheets and Hacks for 401k Plan Sponsors

The author reflects on the significant impact of the Internet in their life, noting its ability to provide vast information and time-saving hacks, particularly in fixing things. They share some lesser-known tips and tricks for 401k plan sponsors to simplify their tasks and enhance efficiency.

Source: Jdsupra.com, April 2025

Roth Treatment of Employer Contributions

SECURE 2.0 includes an optional provision allowing Roth treatment for employer contributions in addition to participant deferrals. In a recent survey, nearly half of plan sponsors indicated they are open to adding this provision, a significant increase from the previous year. Currently, about 20% have already adopted it, while over 25% are considering doing so.

Source: Psca.org, April 2025

SECURE 2.0 in 2025: Here Comes a Big Plan Design Change

As we enter 2025, the implementation of new SECURE 2.0 provisions is imminent. Understanding how these provisions will impact plan design, administration, and costs is essential for effectively advising clients. This knowledge allows you to inform clients about upcoming changes, strategize any necessary administrative adjustments, and coordinate communications with participants.

Source: Penchecks.com, April 2025

What Plan Administrators Need to Know About the 2025 RMD Age Increase

Plan administrators are increasingly focusing on the accuracy of participant birthdates due to upcoming changes in Required Minimum Distributions (RMDs) effective April 1, 2025. Participants who turn 73 in 2024 will need to start taking RMDs from their employer-sponsored retirement plans by this date unless still employed and allowed to defer. Failure to meet this deadline can result in steep penalties: 25% of the missed distribution, or 10% if corrected within two years. Consequently, plan administrators are essential in ensuring compliance and helping participants avoid these penalties. This article reviews several steps towards RMD compliance.

Source: Berwyngroup.com, April 2025

Mandatory Catch-Up Contribution "Rothification" Is Coming to U.S. Savings Plans

The SECURE 2.0 Act mandates that participants aged 50 or older in 401k retirement plans, who are classified as highly compensated (earning at least $145,000, indexed), must make catch-up contributions as Roth contributions rather than pretax contributions. Roth contributions are taxable in the contribution year but allow for tax-free distributions, including earnings. Initially set to take effect in 2024, the implementation has been delayed to 2026 due to administrative readiness concerns. The IRS has introduced proposed regulations to provide guidance on the Roth catch-up contribution requirement for highly compensated participants.

Source: Sidley.com, March 2025

DC Plan Annual Review: Key Steps for Plan Administrators

Regular plan reviews are essential for ensuring compliance and improving performance in Defined Contribution Plans, ultimately helping participants meet their retirement goals. As a plan administrator, you play a key role in managing these plans by overseeing compliance, financial management, and participant engagement. This includes verifying accurate contribution processing, maintaining fee transparency, and providing educational resources to participants, all of which contribute to the efficient operation of the plan. This is a list of items that must be reviewed.

Source: Watkinsross.com, March 2025

DOL Expands Voluntary Fiduciary Compliance Program

Earlier this year, the DOL unveiled updated regulations for its Voluntary Fiduciary Compliance Program. Notably, these new rules introduce a long-anticipated self-correction option for plan sponsors.

Source: Spconsultants.com, March 2025

DOL Publishes New VFCP Model Participant Notice

On March 18, the DOL released a model notice for applicants to the Voluntary Fiduciary Correction Program to inform plan participants about their application to the program. This model notice is specifically for applicants and is not meant for those using self-correction to address errors. The DOL’s Employee Benefits Security Administration anticipates that completing the notice will take plan administrators about one hour on average.

Source: Napa-net.org, March 2025

Written Requests for ERISA Documents

Employers are required to respond to written requests for certain ERISA documents within 30 days to avoid penalties of up to $110 per day. However, there is often ambiguity regarding which documents fall under this mandatory disclosure requirement and what specific plan materials should be provided. This can create challenges for employers in determining their obligations in response to these requests.

Source: Newfront.com, March 2025

SPARK Institute Comment Letter on the Proposal for Roth Catch-Up Contributions

The SPARK Institute has sent this comment letter to the Internal Revenue Service regarding the proposed regulations on catch-up contributions. They say that administering the Roth catch-up mandate will be difficult, particularly in the initial years, and further simplification and clarification would be greatly beneficial. As mentioned towards the end of this letter, SPARK is also requesting that the IRS consider a postponement or offer additional good faith relief, as the final regulations will not be ready in time for implementation in 2026.

Source: Sparkinstitute.org, March 2025

Don't Forget the Disclosures: What's Required to Keep Plan Participants and Beneficiaries Informed

This educational fiduciary training webinar emphasizes the responsibilities needed to keep participants and beneficiaries well-informed. Tailored for committee members and fiduciaries engaged in retirement plan management, the session explores crucial elements of employee engagement, necessary disclosures, and effective fiduciary governance practices. Key topics covered include: Understanding Fiduciary Responsibilities, Required Disclosures, Optional Engagement Strategies, Digital and Paper Notices, and Selecting Service Providers.

Source: Multnomahgroup.com, March 2025

ICI Comment Letter on the Proposal for Roth Catch-Up Contributions

The Investment Company Institute has sent this comment letter to the Treasury Department and the Internal Revenue Service regarding the proposed regulations on catch-up contributions. This proposal aims to amend the regulations under section 414(v) of the Internal Revenue Code to incorporate several changes to catch-up contributions introduced by sections 109, 117, and 603 of the SECURE 2.0 Act.

Source: Ici.org, March 2025

New Self-Correction Option for Voluntary Fiduciary Correction Started March 17, 2025

On March 17, 2025, the DOL introduced a "self-correction" option within its Voluntary Fiduciary Correction Program. This new option allows fiduciaries to correct certain violations without waiting for formal approval of their correction submissions. However, participating fiduciaries are still required to fulfill a notice obligation and provide information to the DOL. The self-correction option applies to two specific types of transactions that would usually be considered prohibited: late contributions for participants and loan repayments, as well as eligible inadvertent failures relating to participant loans.

Source: Erisapracticecenter.com, March 2025

ERIC Comment Letter on the Proposal for Roth Catch-Up Contributions

The ERISA Industry Committee has sent this comment letter to the Internal Revenue Service regarding the proposed regulations on catch-up contributions. In this letter, ERIC supports SECURE 2.0 but acknowledges the challenges in implementing certain provisions, particularly Section 603, which mandates that catch-up retirement plan contributions be made on a Roth basis. While the guidance in Notice 2023-62 and the Proposal are generally helpful, ERIC has suggested improvements as the Treasury and IRS work on finalizing the rules.

Source: Eric.org, March 2025

Adoption of SECURE 2.0 Optional Provisions

The SECURE 2.0 Act of 2022 was significant retirement plan legislation that introduced various required and optional provisions for retirement accounts and employer-sponsored plans. However, plan sponsors have been slow to upgrade their programs due to the complexity of the legislation. Many have chosen to implement only those provisions that require minor adjustments, such as expanded catch-up contributions for participants aged 60-63. While some features have been adopted, there is hesitation around others, primarily due to a lack of available technology for implementation and uncertainty regarding the administration of the various provisions.

Source: Planpilot.com, March 2025

Preventive Measure: Self-Audits Help Your Plan Stay in Compliance

Morgan Lewis partners Amy Pocino Kelly and Dan Salemi and associate Rachel Mann wrote an article for Benefits Magazine about internal compliance self-audits of employee benefit plans. The article discusses the self-audit process, highlights common areas of compliance that plans should target, and notes changes affecting self-audits included in the SECURE 2.0 Act.

Source: Ifebp.org, March 2025

New 401k Plan Requirements End Pre-Tax Catch-Up Contributions for High Earners

On January 10, 2025, the IRS issued proposed regulations regarding age-based catch-up contributions for retirement plans. These contributions, which are available to participants aged 50 or older in 401k plans, allow for additional contributions beyond regular deferrals, regardless of other limits on elective deferrals. The proposed regulations are based on changes made by the SECURE 2.0 Act of 2022 and affect retirement plan participants, beneficiaries, employers, and administrators. Plan sponsors need to consider necessary design or operational changes, consult with plan administrators and recordkeepers for administrative updates, and seek advice from benefits counsel regarding implementation and required amendments to their plans.

Source: Quadecircle.com, March 2025

401k ADP Test Basics

The tax code for 401k plans includes non-discrimination tests to ensure that retirement plans do not disproportionately benefit Highly Compensated Employees over Non-Highly Compensated Employees. The testing process begins with the coverage test, as outlined in IRS Code section 410(b). If the coverage test is passed, or if adjustments are made to pass it, the Average Deferral Percentage test follows. The ADP test uses mathematical comparisons of participation and contribution rates between HCEs and NHCEs to assess potential discrimination in favor of HCEs. This article provides a basic review of the test.

Source: Legacyrsllc.com, March 2025

Early Preparation Tips to Streamline Your Employee Benefit Plan Audit

Plan sponsors should consider their organization's employee benefit plan audit well in advance. Typically, audits cannot commence until spring, when recordkeepers supply the necessary audit package containing detailed reports on the plan's operations for the year. Here is a list of items auditors will require over the coming months, along with steps plan sponsors can take to prepare.

Source: Withum.com, March 2025

What Self-Correction Options Are Available for 401k Plan Fiduciary Mistakes?

The DOL introduced a self-correction component to the Voluntary Fiduciary Correction Program, effective March 17, 2025. This allows retirement plans to self-correct specific failures, such as the late transmission of participant contributions or loan repayments, and certain inadvertent loan failures. To self-correct, a plan official or authorized representative must notify the EBSA by submitting a notice through an online tool, which includes essential information about the plan and the correction made. Unlike regular VFC submissions, self-correctors will receive an automatic acknowledgment email but will not get a "no action" letter.

Source: Thomsonreuters.com, March 2025

Document Retention is an Employer's Duty, Not the TPA's

It's crucial to clarify your third-party administrator's document retention practices, as they may not keep signed copies of plan documents, older versions, or those prepared by previous TPAs. Understand the scope of retention covered in your contract with the TPA and your ultimate responsibilities under ERISA. TPAs are responsible for document compliance from their engagement until they disengage, which includes drafting required restatements every six years, handling interim amendments, and any discretionary amendments the Plan Sponsor chooses to implement.

Source: Klblawgroup.com, March 2025

Sham Employment Terminations and Plan Distributions

To receive a distribution from a qualified retirement plan due to severance of employment, a participant must have a genuine termination of their employment. Sham terminations can create compliance issues for the plan. Usually, qualified retirement plan assets can't be distributed until a specific distribution triggering event occurs, as defined in the plan document. Severance of employment is a common triggering event. However, processing a distribution based on a sham termination can lead to operational failures, risking the plan's qualification and potentially resulting in negative tax consequences for both the participant and the employer.

Source: Retirementlc.com, March 2025

IRS Issues Proposed Regulations Regarding Mandatory Auto-Enrollment Under SECURE 2.0

The IRS has issued proposed regulations regarding the mandatory automatic enrollment requirements under the SECURE 2.0 Act of 2022, which builds on previous interim guidance from IRS Notice 2024-02. Starting with plan years after December 31, 2024, new 401k and 403b plans established after December 29, 2022, must include an eligible automatic enrollment arrangement. The recently proposed regulations clarify that a plan is considered established on the adoption date, irrespective of its effective date, and also provide guidance on how these automatic enrollment requirements will affect plan mergers and spin-offs.

Source: Ktslaw.com, March 2025

Mandatory Automatic Enrollment Is Here

Employers have long had the option to automatically enroll employees in their 401k or 403b plans to boost participation and encourage retirement savings. Due to the success of these automatic enrollment strategies, Congress has decided to make them mandatory. Starting in 2025, many plans that allow participants to make deferral elections will be required to automatically enroll their participants. This article reviews the key points regarding the new requirements.

Source: Ferenczylaw.com, March 2025

How to Avoid Submitting Any Information to the DOL Lost and Found Database

The DOL's Lost and Found Database was established last year as part of SECURE 2.0, but its implementation faced several challenges, including decisions about the required information, the submission process, and whether participation would be voluntary. Despite these difficulties, plan sponsors can minimize their need to submit participant information to the database by using force-out distributions and automatic rollover IRAs, effectively reducing potential risks associated with the database.

Source: Penchecks.com, February 2025

Do 401k Vesting Schedules Help With Worker Retention?

According to IRS rules, defined contribution plans must either immediately vest employer contributions or implement a cliff or graded vesting schedule. A cliff vesting schedule provides complete vesting at a specific point within three years, while a graded schedule allows for gradual vesting over six years. New research from Vanguard suggests that vesting schedules, traditionally used to encourage employee retention, may not be as effective as previously thought.

Source: Napa-net.org, February 2025

The Most 401k Plan Errors

401k plans are complex systems involving various stakeholders, which can lead to frequent errors. As an ERISA attorney, Ary Rosenbaum frequently encounters specific recurring mistakes in these plans which he reviews here.

Source: Jdsupra.com, February 2025

DOL Updated Voluntary Fiduciary Correction Program: Self-Correction or Self-Incrimination?

In January 2025, the DOL released an updated version of the Voluntary Fiduciary Correction Program, which includes the formal establishment of a self-correction component. This update, influenced by feedback on a November 2022 proposal, becomes effective on March 17, 2025. While VFCP does not charge a user fee, potential costs and the risk of DOL rejection for technical reasons may deter some from using it, especially for minor issues like late deposits. Additionally, plan sponsors risk investigation if they attempt to use the SCC multiple times for repeated violations. It is suggested that they improve their internal procedures instead.

Source: Ferenczylaw.com, February 2025

New Self-Correction Component under the DOL's Voluntary Fiduciary Correction Program

The Voluntary Fiduciary Correction Program provides a way for plan sponsors and fiduciaries to address and correct violations of ERISA before facing enforcement actions from the DOL. On January 15, 2025, the DOL updated the VFCP, making it more accessible and user-friendly. The amendments aim to encourage plan sponsors and fiduciaries to voluntarily correct issues by simplifying the process and broadening the scope of the program for addressing prohibited transaction errors.

Source: Faegredrinker.com, February 2025

IRS Proposes Regulations for the Roth Catch-Up Rule

On January 13, 2025, the IRS proposed new regulations providing guidance on the SECURE 2.0 Act's requirement for certain participants to make catch-up contributions exclusively on a Roth basis. These proposed rules come after IRS Notice 2023-62, which offered limited guidance and allowed a two-year administrative transition period, delaying the compliance date. With the 2026 deadline approaching, concerns within the retirement plan industry arise regarding plan sponsors' ability to implement the rule effectively and address various related issues. The IRS's proposed regulations aim to clarify many of these concerns and responsibilities surrounding the rule's implementation.

Source: Ajg.com, February 2025

Missing Participants and Fiduciary Responsibility

Missing participants pose significant challenges for plan sponsors, leading to long-term liabilities, increased costs, and fiduciary risks. The DOL is actively scrutinizing how plan sponsors locate and distribute benefits to these participants, even asserting fiduciary duty breaches in cases of inadequate searches. In January 2021, the DOL provided best practices for finding missing participants and documenting efforts. In January 2025, the DOL introduced a temporary enforcement policy allowing plans to send small account balances of missing participants to a state's unclaimed property program. This 6-page white paper reviews the issue in some detail.

Source: Ajg.com, February 2025

Three Key SECURE 2.0 Provisions Effective in 2025

The SECURE 2.0 Act of 2022 expands on the original SECURE Act of 2019 and includes over 90 provisions aimed at improving retirement savings. Key objectives of the act include helping individuals save more effectively, enhancing access to retirement plans, and increasing the flexibility of savings options. While most provisions are already in effect, some important changes aimed at boosting retirement savings will take effect in 2025. They are reviewed here.

Source: Spconsultants.com, February 2025

What to Know About Part-Time Employee Eligibility for Retirement Plans

The SECURE 2.0 Act of 2022 introduces significant changes to the eligibility criteria for long-term, part-time employees in employer-sponsored 401k and 403b retirement plans. Laurie Lombardo from Voya Financial explains that employees aged 21 and older can now participate if they have either one year of service with at least 1,000 hours or two consecutive years with at least 500 hours. Employers must evaluate their part-time workforce to determine eligibility, and they face new administrative requirements. While some may choose the minimum compliance route, others might make part-time employees immediately eligible, potentially reducing administrative burdens.

Source: Planadviser.com, February 2025

Labor Department Updates the Voluntary Fiduciary Correction Program

On January 14, 2025, the DOL updated its Voluntary Fiduciary Correction Program for the first time since 2006. This program aims to encourage the voluntary correction of certain fiduciary violations in eligible transactions, helping to prevent potential enforcement actions and penalties from the DOL. The updated program has been simplified and expanded to facilitate less costly corrections, promoting more plans to address breaches of fiduciary duty under ERISA. A key addition is a self-correction feature, which was not available in the previous version.

Source: Milliman.com, February 2025

Puerto Rico Announces 2025 Limits on Qualified Retirement Plans

On January 23, 2025, the Puerto Rico Department of the Treasury released Internal Revenue Circular Letter No. 25-01, which details the limits for Puerto Rico qualified retirement plans for 2025. These limits are based on Section 401(a) of the U.S. Internal Revenue Code, as required by the PR Code. The announcement includes updated figures for annual compensation, benefits, and contribution limits, which align with the IRS's published retirement plan limits.

Source: Littler.com, February 2025

DOL Finalizes Update to Voluntary Fiduciary Correction Program

On January 15, 2025, the DOL announced updates to its Voluntary Fiduciary Correction Program and made final amendments to Prohibited Transaction Exemption 2002-51. The key change allows plan fiduciaries to self-correct late deposits of participant contributions and loan repayments, as well as certain loan errors, by simply filing a notice of correction with the DOL instead of a full VFCP application. These amendments will take effect on March 17, 2025.

Source: Groom.com, February 2025

2025 Benefit Limits and Annual Amounts all in One Place

The author describes themselves as a "benefit nerd," relying on printed charts of annual benefit plan limits for quick reference. Frustrated by the lack of a comprehensive online chart that includes both retirement and health plan limits, they decided to create their own. The goal is to provide a useful resource for others.

Source: Brickergraydon.com, February 2025

The DOL Adopts Self-Correction for Common Retirement Plan Fiduciary Breaches

For the first time since its inception in 2002, the DOL has updated its Voluntary Fiduciary Correction Program to include a Self-Correction Component. This new feature allows retirement plan sponsors to efficiently self-correct common compliance issues, such as late contributions and loan repayments. Additionally, an amendment to an existing prohibited transaction exemption has been finalized, offering excise tax relief for transactions that have been self-corrected. Both the SCC and excise tax relief will take effect on March 17, 2025.

Source: Pensionsandbenefits.blog, February 2025

SECURE Act 2.0 Mandatory Automatic Enrollment Requirements for New Retirement Plans Guidance Released

The SECURE 2.0 Act of 2022 aims to boost participation in retirement plans, and on January 10, 2025, the IRS proposed regulations mandating automatic enrollment for new 401k and 403b plans. This follows the addition of Code Section 414A, which states that plans must meet specific automatic enrollment criteria to be considered qualified. The proposed regulations will take effect six months after the final regulations are issued. However, with potential changes in presidential administration and agency policies, there is uncertainty about whether these regulations will be finalized or altered. Plan sponsors are advised to continue complying with the proposed rules in good faith until they are finalized.

Source: Pensionsandbenefits.blog, February 2025

DOL Muddies the Water With Escheatment Guidance for Retirement Plans

The DOL has issued Field Assistance Bulletin 2025-01, which outlines a temporary non-enforcement policy allowing plan fiduciaries to escheat small retirement benefit payments to state unclaimed property funds for missing participants. The bulletin offers insight into the DOL's perspective on the fiduciary decision to voluntarily escheat benefits. However, the relief provided is limited and the DOL indicates that this non-enforcement policy is temporary, as it plans to consider issuing more formal guidance on escheatment in the future.

Source: Groom.com, February 2025

Got COLA? The IRS Does

The IRS has released a detailed chart outlining over 20 rates and thresholds for retirement plans applicable for the current year, alongside the rates from 1989 to 2024. This chart provides essential information on compensation and contribution limits, particularly influenced by annual cost-of-living adjustments. It includes key limits related to defined benefit and contribution plans per the Internal Revenue Code Section 415, as well as specifics on SEP, SIMPLE, and IRA limits. The chart highlights changes in rates over the current decade and offers insights into longer-term trends from 1989 to 2019.

Source: Asppa-net.org, February 2025

IRS Proposed Regulations on Catch-Up-As-Roth Contributions Effective January 1, 2026

On January 10, 2025, the IRS released proposed regulations regarding several provisions of the SECURE 2.0 Act. One key provision focuses on catch-up contributions for employees aged 50 and older in 401k, 403b, and governmental 457b plans. The IRS is open to public commentary on these regulations until March 14, 2025. Starting January 2026, employees who earned over $145,000 in FICA wages in the prior year will be required to direct their catch-up contributions to Roth accounts (after-tax contributions) for the following year. This changes the previous timeline established in Notice 2023-62, extending the implementation to taxable years beginning January 1, 2026.

Source: Tri-ad.com, February 2025

You Can Transfer Balances of $1,000 or Less to State Unclaimed Property Funds, But Should You?

The DOL's Field Assistance Bulletin 2025-01 has raised concerns due to its timing and content. The bulletin references older reports from 2019 and 2014, making its relevance unclear, and complicating an already straightforward process. It provides temporary relief for fiduciaries transferring retirement plan benefits of $1,000 or less owed to missing participants to a state unclaimed property fund, but this comes with complex conditions. Critics argue that a simpler solution exists: transferring balances of $1,000 or less to an automatic rollover IRA.

Source: Penchecks.com, February 2025

2025 Puerto Rico Retirement Plan Limits

On January 22, 2025, the Puerto Rico Treasury Department issued Internal Revenue Circular Letter No. 25-01, which specifies the limits for retirement plans under Section 1081.01(a) of the Puerto Rico Internal Revenue Code for the year 2025. This includes cost-of-living adjustments published by the U.S. IRS in Notice 2024-80 and IR-2024-285 on November 1, 2024. These limits apply to taxable years beginning on or after January 1, 2025.

Source: Mcvpr.com, February 2025

Things I Worry About: DOL Investigations and Unsuspecting Plan Sponsors

The DOL has released a fact sheet highlighting its recovery of nearly $1.4 billion for employee benefit plans, participants, and beneficiaries. A significant focus of their efforts has been on identifying "missing participants," particularly through their "Terminated Vested Participant Benefits Payments" program, which recovered approximately $429.2 million in the 2023-2024 fiscal year. Plan sponsors, fiduciaries, and their advisors are encouraged to assess and address the issue of missing participants following DOL guidelines.

Source: Fredreish.com, February 2025

The DOL May Not Actually Want to Hear From You: New Guidance Streamlining the Voluntary Fiduciary Correction Program

The DOL has updated its Voluntary Fiduciary Correction Program, which has been in place for over 20 years, to facilitate plan sponsors in correcting specific fiduciary breaches. The revised VFCP now allows for self-correction of failures to timely remit contributions and loan repayments that were withheld from participants' salaries. Previously, administrators had to formally submit a request to the DOL, including full correction of the delinquency, to obtain a "no action letter" and avoid being accused of a fiduciary breach. The updated process, if other conditions are met, also prevents the DOL from claiming a prohibited transaction and provides an exemption from any excise tax related to such transactions.

Source: Beneficiallyyours.com, February 2025

DOL Will Permit Self-Correction of Delinquent Contributions and Loan Payments Under Qualified Retirement Plans

On January 14, 2025, the DOL announced final updates to the Voluntary Fiduciary Correction Program, marking the first changes in nearly 20 years. The key improvement is the introduction of a self-correction process for small-dollar delinquent participant contributions and loan repayments, effective March 17, 2025. This change allows plan sponsors to correct certain prohibited transactions without needing prior approval from EBSA, thus avoiding civil penalties under ERISA. The streamlined procedure aims to assist with the correction of the most common issues within the VFCP, specifically targeting minor delinquencies.

Source: Sidley.com, February 2025

Retirement Plan Sponsors and Participants Get LA Wildfire Relief

The IRS has extended tax filing and payment deadlines for retirement plan sponsors and participants affected by the Los Angeles wildfires, with the new deadlines set until October 15, 2025. This extension will automatically apply to certain filings with the Pension Benefit Guaranty Corporation. The SECURE 2.0 Act of 2022 also permits plan sponsors to provide affected participants with access to their retirement savings and other assistance.

Source: Mercer.com, February 2025

DOL Issues Guidance on Retirement Plan Treatment of Missing Participants With Small Balances

The DOL has issued Field Assistance Bulletin 2025-01, offering new guidance for fiduciaries of ERISA-covered retirement plans. This Bulletin allows fiduciaries to transfer retirement benefits of less than $1,000 to a state unclaimed property fund temporarily. This update is notable given that the previous guidance from DOL Field Assistance Bulletin 2014-01 recommended rolling over benefits for missing participants to an individual retirement account. However, many employers have faced challenges in finding IRA providers that will accept small accounts and have been concerned about potential fees that could deplete these accounts.

Source: Mccarter.com, February 2025

SECURE 2.0 Administrative Pandemonium: Are You Keeping Up?

In recent months, there has been significant activity surrounding the implementation of SECURE 2.0 provisions, a set of laws enacted at the end of 2022 that impact retirement plans. Employer plan sponsors must make informed decisions regarding SECURE 2.0, carefully track these decisions, and ensure compliance with legal requirements. They should avoid impulsive reactions and seek guidance from benefits counsel and advisors to strengthen their processes and prevent future issues. There are still unresolved questions and considerations regarding these decisions that warrant careful thought.

Source: Hawleytroxell.com, February 2025

DOL Updates Voluntary Fiduciary Correction Program

In 2002, the DOL established the Voluntary Fiduciary Correction Program to encourage voluntary compliance with ERISA. VFCP allows employers and plan fiduciaries facing potential liability for fiduciary duty breaches to seek relief from enforcement actions and civil penalties, provided they adhere to specific criteria and procedures. The program is linked to prohibited transaction class exemption 2002-51, which offers relief from excise tax for certain prohibited transactions. The DOL recently announced modifications to VFCP, effective March 17, 2025, notably introducing two new self-correction features.

Source: Wagnerlawgroup.com, January 2025

IRS Proposed Regulations on Catch-Up-As-Roth Contributions Effective January 1, 2026

On January 10, 2025, the IRS released proposed regulations concerning several provisions of the SECURE 2.0 Act, particularly regarding catch-up contributions for employees aged 50 and older in 401k, 403b, and governmental 457b plans. The IRS is open to comments on these regulations until March 14, 2025. Starting January 2026, employees who earned over $145,000 in FICA wages the previous year must make their catch-up contributions to Roth accounts (after-tax contributions) for the following calendar year. For instance, employees meeting this income threshold in 2025 will be required to use Roth accounts for their catch-up contributions in 2026.

Source: Tri-ad.com, January 2025

ERISA Moments: DOL Investigations - Priorities for 2025

Faegre Drinker attorneys Fred Reish and Brad Campbell provide concise updates on current trends and developments in ERISA in their quick-hit series. This latest episode focuses on the Department of Labor's priorities for investigations in 2025. This series offers a high-level overview of important topics within the ERISA realm.

Source: Spotlightonbenefits.com, January 2025

Missing Participants: What to do With Abandoned Accounts

Plan sponsors and administrators have long faced challenges in managing accounts belonging to participants who left employment years ago and are now unlocatable, often referred to as "missing participants." Despite their efforts, many plans still hold accounts for these individuals. On January 14, 2025, the DOL released Field Assistance Bulletin 2025-01, which permits sponsors and administrators of ongoing defined contribution plans to transfer unclaimed small accounts to the state unclaimed property fund corresponding to the participant's last known address, as long as certain conditions are met.

Source: Beneficiallyyours.com, January 2025

Form 5500: The Role of the Accountant and the Audit Report

An accountant's role in the annual Form 5500 for employee benefit plans is significant but often misunderstood. While accountants and auditors play a crucial part in preparing the report from financial and regulatory perspectives, their responsibilities are limited. They are responsible for detecting material fraud in financial statements but do not guarantee a plan's qualified status or the conduct of fiduciaries. The specific scope of an accountant's responsibility is shaped by the interplay between DOL regulations and the standards of the accounting profession.

Source: Employeebenefitslawgroup.com, January 2025

Electronic Delivery of Participant Notices

Plan participants must receive notices and disclosures about their 401k plans securely and promptly. Traditional paper delivery is costly and not preferred by many, with most people rarely reading such notices in paper form. While paper notices can still be distributed at meetings or mailed, placing them in common areas isn't sufficient. The e-Disclosure Safe Harbor Rule allows for electronic delivery as the default method, provided that participants can be reached electronically and receive proper initial notifications. This offers a more efficient and less expensive alternative for communicating important plan information.

Source: Consultrms.com, January 2025

A Deficient Form 5500 Filing is Preferable to a Delinquent Filing

At the AICPA National Conference, Marcus Aron, the Chief of the Division of Accounting Services at the DOL's Employee Benefit Security Administration, provided an update, joined by Scott Albert from the Division of Reporting and Compliance. Marcus discussed the complex issue of filing Form 5500 in situations where the audit cannot be completed by the deadline, addressing the challenges and considerations involved in such scenarios. They clarified the distinction between delinquent filings, which are late, and deficient filings, which are timely but inaccurate or incomplete. Aron emphasized the importance of understanding these differences in the context of compliance.

Source: Belfint.com, January 2025

IRS Announces New Rules for Catch-Up Contributions: A Timeline of Changes and Where We Stand Today

On January 13, 2025, the IRS proposed regulations (REG-101268-24) to help plan administrators and participants better understand and implement new rules related to retirement plans. These updates build on the SECURE 2.0 Act of 2022 and address the administrative challenges faced by employers, plan administrators, payroll providers, and financial professionals. This document outlines key provisions of the regulations, their evolution, and their current implications.

Source: 5500audit.com, January 2025

IRS Proposes Regulations on SECURE 2.0 Act Catch-Up Provisions

The IRS has proposed regulations regarding catch-up contributions under the SECURE 2.0 Act. Key changes include: Increased catch-up contribution limits for participants aged 60 to 63, starting in 2025. Mandatory Roth tax treatment for catch-up contributions by 401k participants earning over $145,000 from the previous calendar year, effective from 2024. Transition relief allows plans to let all participants, including those above the income threshold, make pre-tax catch-up contributions until 2026. These plans will still meet the new requirements even if they do not offer designated Roth contributions. These highlights summarize the main aspects of the proposed regulations.

Source: 401khelpcenter.com, January 2025

IRS Issues Proposed Regulations on Automatic Enrollment Requirements

The IRS has issued proposed regulations stemming from the SECURE 2.0 Act, which mandates that certain retirement plans established after December 29, 2022, must operate as automatic enrollment plans for plan years beginning after December 31, 2024. These regulations outline requirements for qualified cash or deferred arrangements, including initial contribution percentages, automatic increase provisions, permissible withdrawals, and investment requirements. Additionally, they specify exemptions for certain plans and clarify that most employees must be included in automatic enrollment programs. The regulations also include modifications to previous IRS guidance on automatic enrollment.

Source: 401khelpcenter.com, January 2025

IRS Issues Guidance on Mandatory Automatic Enrollment

On January 10, 2025, the IRS released Proposed Regulations concerning the automatic enrollment requirement for newly established 401k and 403b plans under SECURE 2.0. These regulations build on previous interim guidance from late 2023 and include clarifications on participant notice requirements. While the regulations will take effect six months after finalization, the automatic enrollment mandate itself is applicable for plan years starting January 1, 2025. For plans before the final rules are effective, compliance will be assessed based on a good faith interpretation of the law.

Source: Groom.com, January 2025

IRS Issues Much Anticipated Guidance on Catch-Up Contributions

On January 10, 2025, the IRS proposed regulations regarding the SECURE 2.0 Act's catch-up contributions, providing much-anticipated guidance but highlighting the complexities involved in implementation. The regulations indicate that the mandatory Roth catch-up provision will create significant administrative challenges for employers and plan administrators, regardless of whether a qualified Roth contribution program is offered. Although the increased catch-up contribution is optional, plan sponsors must consider various implementation factors, requiring coordination with payroll, third-party administrators, and legal counsel to ensure compliance with legal requirements specific to their situations.

Source: Groom.com, January 2025

Self-Correction of Late Deferrals Will Soon be Permissible

The DOL has issued a revised Voluntary Fiduciary Compliance Program, introducing a self-correction component for certain delinquent participant contributions, a significant update welcomed by the industry. Late participant deferrals constitute about 95% of corrections handled through the VFCP, often identified by plan auditors or prompted by DOL letters encouraging voluntary participation. This new self-correction option aims to simplify addressing this common issue. However, it won't be available until March 17, 2025.

Source: Brickergraydon.com, January 2025

Missing Participant Enforcement Relief Available for Fiduciaries

On January 14, the Department of Labor announced a new enforcement relief policy aimed at retirement plan fiduciaries. This policy, outlined in Field Assistance Bulletin No. 2025-01, allows fiduciaries to transfer benefit payments of $1,000 or less owed to missing participants to state unclaimed property funds without facing action under ERISA Section 404(a), provided certain conditions are met. Assistant Secretary Lisa Gomez stated that the policy offers fiduciaries an additional way to manage small outstanding retirement benefits while supporting efforts to reconnect participants with their benefits.

Source: Asppa-net.org, January 2025

IRS Answers Calls for Additional SECURE 2.0 Guidance

On January 10, the IRS and Treasury issued additional guidance on SECURE 2.0 Act provisions related to automatic enrollment and catch-up contributions, as part of the Consolidated Appropriations Act of 2023. The proposed regulations clarify that high-income earners must designate their catch-up contributions as after-tax Roth contributions; employers cannot bypass this requirement. However, plans can still offer catch-up contributions to eligible employees without a Roth option. The guidance is seen as beneficial for employers, although it introduces complexity for plans that undergo nondiscrimination testing and may lead to participant requests for Roth features.

Source: Groom.com, January 2025

And Not a Moment Too Soon: Mandatory Automatic Enrollment Guidance

This week at the Treasury was eventful, as two significant pieces of guidance were released. This summary focuses on the proposed Mandatory Automatic Enrollment (MAE) regulations. The proposed regulations were issued on January 9, 2025, addressing outstanding questions as the mandatory automatic enrollment took effect at the start of the year. Previous communications outlined anticipated issues, and this will assess how those expectations align with the newly issued regulations.

Source: Ferenczylaw.com, January 2025

Field Assistance Bulletin No. 2025-01: Missing Participants and Beneficiaries

This Field Assistance Bulletin outlines a temporary enforcement policy under ERISA regarding small retirement benefit payments owed to missing participants or beneficiaries. It allows responsible plan fiduciaries to voluntarily transfer payments, including uncashed checks, to a state unclaimed property fund without facing violations under ERISA section 404(a). This is applicable when the present value of the owed benefits is $1,000 or less, and the plan fiduciary meets specific conditions outlined in the memorandum. Further guidance from the Department will be provided in the future.

Source: Dol.gov, January 2025

IRS Releases Guidance on Mandatory Roth Catch-ups, Autoenrollment

On January 10, 2025, the IRS issued proposed regulations regarding the planned restriction of catch-up contributions to Roth accounts beginning in 2026 for certain individuals. It also released notice of proposed auto-enrollment requirements under the SECURE 2.0 Act. Here are the key provisions of this guidance.

Source: Captrust.com, January 2025

Act 3: To Roth or Not to Roth: That Is No Longer the Question for Some Catch-Up Eligible Individuals

The IRS recently released proposed regulations concerning mandatory Roth catch-up contributions, following amendments made by SECURE 2.0. Starting in 2024, individuals earning over $145,000 from the previous year will need to designate their catch-up contributions as Roth contributions, eliminating the option for pre-tax contributions. The IRS had previously postponed the implementation of this requirement from 2024 to 2026. The new proposed regulations address several key questions from the benefits community regarding this mandatory Roth provision.

Source: Brickergraydon.com, January 2025

ERISA 2025 Requirements Calendar

Plan sponsors of defined benefit and defined contribution retirement plans should be mindful of key deadlines and dates for ensuring compliance in 2025, assuming a calendar year plan. The dates on this chart may vary based on the plan sponsor's fiscal year, and not all deadlines may apply. Alongside these important dates, sponsors should also familiarize themselves with the 2025 contribution plan limits and any relevant rolling notices. It's critical to track these elements to maintain compliance and effectively manage retirement plans.

Source: Bdo.com, January 2025

IRS Updates Procedures for Retirement Plans Requesting IRS Advice

The IRS has released Revenue Procedures 2025-1 and 2025-4, which update the guidance and procedures related to determination letters and letter rulings for retirement plans. Revenue Procedure 2025-1 outlines the types of advice the IRS offers to taxpayers, such as letter rulings, closing agreements, determination letters, information letters, and oral advice. Revenue Procedure 2025-4 details the procedures for obtaining specific letter rulings, closing agreements, determination letters, information letters, and oral advice for qualified retirement plans.

Source: Asppa-net.org, January 2025

Voluntary Fiduciary Correction Program Final Rule Issued by the DOL

On January 14, the Department of Labor released its final rule regarding updates to the Voluntary Fiduciary Correction Program. The most notable changes include the introduction of two new self-correction features. Proposed in November 2022, the VFCP permits fiduciaries to report specific administrative errors to the DOL and receive a no-action letter. This includes issues like prohibited transactions, improper loans, and late contributions, with a particular emphasis on addressing year-end remittance of delinquent contributions.

Source: Asppa-net.org, January 2025

IRS Issue Proposed Regulations on New Roth Catch-Up Rule, Other SECURE 2.0 Act Provisions

The IRS has released proposed regulations concerning the SECURE 2.0 Act, specifically focusing on catch-up contributions available to employees aged 50 and older in 401k plans. The regulations detail a requirement that catch-up contributions from certain higher-income participants be designated as after-tax Roth contributions. They also offer guidance for plan administrators on implementing this new Roth catch-up rule, incorporating feedback from comments on a previous notice issued in August 2023. Additionally, the proposed regulations address an increased catch-up contribution limit for specific participants, including those aged 60-63 and employees enrolled in newly established SIMPLE plans.

Source: Irs.gov, January 2025

IRS Issue Proposed Regulations on New Automatic Enrollment Requirement for 401k and 403b Plans

The IRS has released proposed regulations related to the SECURE 2.0 Act, which includes a mandate for newly established 401k and 403b plans to automatically enroll eligible employees starting in the 2025 plan year. The proposed regulations offer guidance for plan administrators on implementation and will apply to plan years starting more than six months after the final regulations are released. In the interim, administrators must follow a reasonable, good faith interpretation of the statute.

Source: Irs.gov, January 2025

IRS Posts FAQs for SECURE 2.0 Disaster Relief Guidance

Congress has historically provided optional disaster relief for retirement plan sponsors to assist participants in accessing funds during natural disasters, but this assistance often arrived too late. The SECURE 2.0 Act of 2022 addresses this issue by establishing automatic and permanent disaster relief that becomes effective immediately upon the declaration of a "major disaster" by FEMA. This relief is retroactive to January 26, 2021, aiming to streamline the previous ad hoc assistance. In May 2024, the IRS released a FAQ page to offer additional guidance to plan sponsors regarding this provision. This article in the Journal of Pension Benefits discusses the SECURE 2.0 disaster relief and the IRS's related guidance.

Source: Groom.com, January 2025

Defined Contribution Retirement Plan: 2025 Compliance Calendar

This 4-page Retirement Plan Compliance Calendar outlines the essential reporting, disclosure, and notice requirements for Defined Contribution plans for the year 2025. It specifies due dates for these compliance obligations, which are based on a calendar plan year and applicable to plans governed by ERISA. The calendar serves as a helpful reference for retirement plan sponsors to ensure they meet their regulatory responsibilities throughout the year.

Source: Usicg.com, January 2025

2025 Newfront ERISA for Employers Guide: An Overview of EB's Overarching Legal Framework

The 49-page document addresses several key topics related to ERISA compliance, including: Plan Document and SPD: It explains how wrap documents can be used to meet ERISA requirements. Form 5500: This section outlines when reporting is necessary, potential penalties for non-compliance, and the obligation to distribute the Summary Annual Report to employees. Fiduciary Duties: It provides a practical overview of the core four fiduciary duties under ERISA that employers must adhere to. Eligibility: The document emphasizes the importance of clearly defining eligibility classes and consistently applying conditions to prevent issues. Special Issues: It touches on topics such as ERISA preemption, annual notice requirements, and the classification of benefits subject to ERISA. Overall, the document serves as a comprehensive guide to understanding and navigating ERISA compliance for employers.

Source: Ctfassets.net, January 2025

New Year Brings New Automatic Enrollment and Escalation Requirements for Some Recently Adopted 401k and 403b Plans

The SECURE 2.0 Act of 2022 mandates that starting January 1, 2025, newly adopted 401k and 403b plans must implement automatic enrollment and escalation features. Participants will be automatically enrolled to make pre-tax contributions between 3% and 10% of their eligible pay, with an annual increase of one percentage point until contributions reach at least 10%, but no more than 15%. Employers should also consider IRS guidance issued in December 2023 regarding how these requirements apply to plan mergers. The guidance indicates that depending on the circumstances, a merger could result in the newly merged plan being subject to or exempt from the automatic enrollment requirements.

Source: Benefitsnotes.com, January 2025

Required Minimum Distributions for 401k and 403b Plans

The first Required Minimum Distribution must be taken by April 1 of the year following the latter of when a participant turns 73 or retires (if allowed by the plan). For 5%-or-more owners, RMDs must begin by April 1 following their 73rd birthday, regardless of employment status. The minimum distribution rules must be explicitly included in the plan to maintain its tax-qualified status. Recordkeepers typically notify participants about RMDs and assist with calculations, but failure to comply with RMD rules can result in qualification errors for the plan, with excise taxes imposed on individuals. This scenario creates confusion over accountability, as plan sponsors, recordkeepers, and participants often blame each other for RMD violations, leaving everyone with a problem.

Source: Belfint.com, January 2025

IRS Adds New Category to the 2024 Required Amendments List

The IRS has expanded its "Required Amendments" List by adding a new Part C that focuses on "optional amendments" that may have been influenced by recent law changes or IRS guidance. An example provided is section 604 of the SECURE 2.0 Act, which allows plans to offer Roth treatment for employer or nonelective contributions starting in 2023. The IRS issued guidance on this in Notice 2024-2, and plans may need to be amended to comply with this guidance by December 31, 2026.

Source: Groom.com, January 2025

SECURE 2.0, Retirement Income, and Litigation Risk Lead the DC Menu for 2025

As 2025 approaches with significant political and regulatory uncertainty, defined contribution plan executives are urged to focus on proactive measures rather than reactive responses. Mikaylee O’Connor from NEPC highlights that uncertainty can lead to inaction, emphasizing the importance of implementing mandatory SECURE 2.0 requirements, evaluating appropriate retirement income products for employees, and reviewing plan documents to mitigate litigation risks. Michael Volo of CAPTRUST Financial Advisers notes the lack of clarity regarding retirement plan policies due to potential shifts in leadership and regulatory bodies in the coming year.

Source: Pionline.com, December 2024

Extension of Certain Proposed RMD Regulations

The IRS announced the extension of the effective date for certain provisions in the proposed required minimum distribution regulations, which were originally issued on July 19, 2024. The new effective date will apply no earlier than the 2026 distribution calendar year. The regulations include updates reflecting recent IRS guidance and changes from the Setting Every Community Up for Retirement Enhancement Act of 2019 and the SECURE 2.0 Act of 2022. These updates affect various retirement plans, including defined benefit and defined contribution plans.

Source: Principal.com, December 2024

Key Terms and What They Mean

Retirement plans are subject to various legal requirements and terminology, making it essential for sponsors to grasp key terms and their implications for participants. To aid in this understanding, online definitions from the IRS are a useful resource, as well as definitions provided by the Department of Labor related to plans and compliance with the Employee Retirement Income Security Act.

Source: Plansponsor.com, December 2024

How Does a Retirement Plan Provide Disaster Relief? (Part 1)

The term "disaster relief" invokes the image of the Red Cross and other care organizations rushing in with food, blankets, medical care and temporary housing to those impacted by an earthquake, flood, hurricane, or fire. But when it comes to a retirement plan, what is relief for a disaster?

Source: Klblawgroup.com, December 2024

IRS Delays Application of Certain RMD Final Regs to 2026 Distribution Calendar Year

The IRS announced in Announcement 2025-02 that certain future regulations regarding required minimum distributions will take effect in the 2026 distribution calendar year. This follows concerns raised by commenters about the proposed regulations amending specific Treasury regulations. Until these amendments are applicable, the IRS advises that taxpayers should apply a reasonable, good-faith interpretation of the existing statutory provisions.

Source: Asppa-net.org, December 2024

IRS Extends Deadline for Certain RMDs

The Internal Revenue Service and the Department of the Treasury on Wednesday issued an announcement stating that several aspects of required minimum distribution rules will not apply until 2026. The decision was made after commenters expressed concerns about challenges in implementing the final regulations.

Source: 401kspecialistmag.com, December 2024

DOL Launches Retirement Savings Lost and Found

The SECURE 2.0 Act of 2022 introduced a new Section 523 to ERISA, mandating the creation of an online database called the Retirement Savings Lost and Found. This database aims to assist individuals in locating unclaimed retirement benefits by identifying the current plan administrators of employer-sponsored plans. On November 18, 2024, the DOL launched a Voluntary Information Collection Request to retirement plan administrators and recordkeepers to start populating the RSLF. The current RSLF is narrower in scope compared to earlier proposals and serves as a starting point for the database, while also addressing key concerns regarding data security and fiduciary responsibilities that were not fully resolved in previous proposals.

Source: Verrill-law.com, December 2024

Plan Sponsors Face Legal Challenges Over 401k Plan Forfeiture Use

ERISA was established to protect plan assets and impose legal responsibilities on fiduciaries. Typically, employers and their delegates are considered fiduciaries and must act in the best interests of the plans and their participants. Recently, several lawsuits have emerged against plan sponsors concerning the use of a plan's forfeiture account to lower future employer contributions in 401k plans, with around two dozen such cases currently pending. Although the future of these lawsuits is uncertain, employers may want to consider protecting themselves by amending their plan document to provide a predetermined, specific order in which forfeiture funds shall be used.

Source: Phelps.com, December 2024

SECURE 2.0 in 2025: Here Comes a Big Plan Design Change

As we approach 2025, new provisions from SECURE 2.0 will be implemented, impacting plan design, administration, and costs. Understanding these provisions will enable you to better advise your clients on how they may affect their plans. This knowledge will help you strategize necessary administrative changes and effectively communicate with participants. This article provides a detailed review of these provisions.

Source: Penchecks.com, December 2024

IRS Issues 2024 Required Amendments List for Qualified Plans and 403b Plans

The IRS issued Notice 2024-82, which outlines the 2024 Required Amendments List for qualified plans under IRC sections 401(a) and 403(b). This RA List indicates the deadline for plan amendments necessary to comply with recent legislative and regulatory changes that affect these plans, applicable to both individually designed and pre-approved plans. Each year's RA List includes changes for which the IRS has provided guidance or determined that no guidance is needed. The 2024 RA List includes amendments related to the SECURE Act, the Bipartisan American Miners Act, the CARES Act, the Relief Act, and the SECURE 2.0 Act.

Source: Milliman.com, December 2024

QPAM Amendments Impact on CITs: What Banks and Their Advisers Need to Know

Effective June 17, 2024, the DOL has adopted significant amendments to Prohibited Transaction Exemption 84-14, known as the "QPAM exemption." This exemption allows investment funds, including collective investment trusts for employee benefit plans under ERISA, to conduct transactions with parties in the interest of those plans, provided the fund's asset management is under the discretionary control of a qualified professional asset manager. This article discusses the origins and objectives of the Sole Responsibility Requirement within this framework and its implications for arrangements between banks and investment advisors concerning CITs. It posits that if banks and advisors follow specific guidelines, they can ensure compliance with the exemption, thereby enabling them to engage in transactions with parties in interest associated with their CITs.

Source: Klgates.com, December 2024

Planning for 2025: Employee Benefit Plan Changes Taking Effect

As the new year approaches and a new administration begins, changes to employee benefit plans will be implemented in 2025 due to existing laws like ERISA and the Setting Every Community Up for Retirement Enhancement Act of 2022. This summary highlights these upcoming changes and provides insights to help plan sponsors stay informed. It's important for plan sponsors to proactively review and adjust their plans to remain compliant with the new mandates.

Source: Bdo.com, December 2024

Most SECURE 2.0 Plan Design Options Fully Available for 2025

The SECURE 2.0 Act, passed in December 2022, introduced over 90 provisions aimed at enhancing defined contribution plans, building on the earlier SECURE Act from December 2019. These provisions have staggered effective dates to allow the Treasury Department and the IRS to provide necessary guidance and for recordkeepers to update their systems. Although final guidance is still pending in some areas, the Treasury and IRS have provided enough information for recordkeepers to implement the new plan design options available under SECURE 2.0. This article discusses some of the more relevant provisions for plans in 2025.

Source: Segalco.com, December 2024

Employee Benefit Plans: Important Considerations for Year-End and 2025

As the 2025 plan year approaches, plan sponsors should take the opportunity to review their plan documents and policies, consider potential design changes, and ensure compliance with new legislative and regulatory requirements. While this overview focuses on key updates affecting retirement and health plans, it's essential to note that for 2024, no amendments are required unless discretionary changes have been made. The SECURE 2.0 Act of 2022 introduces several mandatory and optional provisions that are already in effect, making this an important time for plan sponsors to assess their plans.

Source: Mwe.com, December 2024

RMD Comparison Chart (IRAs vs. Defined Contribution Plans)

This article from the IRS provides a comparison of the Required Minimum Distributions for Individual Retirement Accounts and defined contribution plans. It outlines key differences and similarities in how RMDs are calculated and when they must begin for both types of accounts. The article emphasizes the importance of understanding the rules to avoid penalties for missed RMDs.

Source: Irs.gov, December 2024

SECURE 2.0 Permits Employer Roth Contributions

As the January 1 plan year approaches, 401k plan sponsors are considering potential changes to their plans in light of the features introduced by the SECURE 2.0 Act of 2022. One notable feature allows participants to elect Employer Contributions as Roth amounts, instead of the traditional pre-tax contributions. This option applies to various retirement plans, including 401k, 403b, and governmental 457b plans, as outlined in SECURE 2.0 Section 604. This article serves as a reminder for plan sponsors on how to implement this new provision effectively.

Source: Ferenczylaw.com, December 2024

What Is a plan document?

The question this short item tackles is about the necessity of a plan document. A plan document is defined as the official and legally binding record of a retirement plan's rules. The discussion emphasizes the importance of having this document, not only for compliance with regulations set by the IRS and DOL but also for clarity and confidence in managing employee benefits.

Source: Employeebenefitslawreport.com, December 2024

DOL Retirement Savings Lost and Found Database Begins Voluntary Data Collection Process

On November 18, 2024, the DOL announced the immediate collection of information from retirement plan administrators to create a new online "Retirement Savings Lost and Found" database. This initiative, established by the SECURE 2.0 Act, aims to reconnect individuals who have lost track of their retirement benefits with the corresponding retirement plans. Currently, participation by plan administrators in populating this database is voluntary. This article reviews specific questions addressed in the DOL announcement.

Source: Compliancedashboard.net, December 2024

Is Matching Student Loan Repayments Worth the Cost for Employers?

The SECURE 2.0 Act allows employers to match student loan repayments with retirement plan contributions, providing support for younger employees facing student debt challenges. This benefit can enhance recruitment and retention efforts, making it appealing to HR teams and talent acquisition professionals. However, implementing this feature can lead to significant costs that employers need to evaluate carefully. While the provision offers valuable advantages, it also presents challenges. This article will help HR professionals and plan sponsors understand the practical implications and key factors involved in implementing student loan repayment matching.

Source: 5500audit.com, December 2024

Year-End Considerations for Employer-Provided Retirement Plans

As 2024 approaches, it's important to assess the impacts of recent changes under the SECURE Acts on qualified retirement plans. Although plan amendments are not due until December 31, 2026, qualified plans must be compliant with the new requirements from the law's effective date. This article provides a review of significant changes that have already taken effect or will soon.

Source: Rrlawpc.com, December 2024

2025 DC Plan Compliance Calendar

The document is a compliance calendar for defined contribution plans for 2025. It outlines important deadlines related to various compliance requirements that plan sponsors must adhere to, including notices, filings, and other obligations. Key dates include deadlines for submitting disclosures to participants, filing reports with regulatory agencies, and ensuring plan amendments are made timely. The calendar serves as a useful tool for employers and plan administrators to help them maintain compliance with legal and regulatory standards in managing their defined contribution plans.

Source: Mercer.com, December 2024

2025 Changes in Catch-Up Contributions Available

The article highlights important updates regarding 401k catch-up contributions set to take effect on January 1, 2025. As part of the SECURE 2.0 Act, participants aged 60 to 63 will be able to contribute larger amounts in catch-up contributions compared to previous years, with new limits established. However, the implementation of this provision is not automatic; plan sponsors must actively decide to adopt it for their employees. Additionally, there is currently a lack of guidance from the IRS on how to manage these new limits, which presents some challenges for plan sponsors as they prepare for these changes.

Source: Ferenczylaw.com, December 2024

401k Annual Administration: A Checklist for 2025

Effective annual 401k administration shouldn't be overwhelming for employers, as qualified providers handle the technical aspects. To streamline this process, employers are encouraged to use a checklist for the timely completion of annual tasks. Employers can utilize this checklist for the 2025 plan year to ensure compliance and organization.

Source: Employeefiduciary.com, December 2024

Long-Anticipated VFCP Changes May Be Issued Soon

This piece discusses anticipated changes to the Voluntary Fiduciary Correction Program that may be issued by the DOL in early 2025. The VFCP is a program that allows fiduciaries of employee benefit plans to correct certain violations of ERISA without facing enforcement actions. The proposed modifications are expected to streamline the correction process and make it easier for fiduciaries to comply with regulations. The article highlights the importance of these changes for plan sponsors and fiduciaries, as well as the potential impacts on the administration of retirement plans.

Source: Asppa-net.org, December 2024

Forfeiture Funds: Legal Requirements, Permitted Uses, and Litigation Risk Management

Forfeiture funds in 401k plans consist of unvested employer contributions that revert to the plan when participants leave before becoming fully vested. Effective management of these funds is essential for plan sponsors, who must adhere to federal regulations and their plan documents as fiduciaries. Properly utilizing forfeiture funds minimizes litigation risks and ensures compliance with ERISA fiduciary standards. By regularly reviewing and carefully drafting plan documents, plan sponsors can establish clear guidelines for the use of forfeiture funds, protecting both the plan and its fiduciaries from potential legal issues.

Source: Quarles.com, November 2024

Key SECURE 2.0 Act Updates for Defined Contribution Retirement Plans

Beginning in 2025, new regulations will impact 401k and 403b retirement plans concerning long-term part-time employees, automatic enrollment, catch-up contributions, and Roth treatment for high earners. These updates reflect a significant shift in the retirement planning landscape aimed at enhancing access and contribution flexibility for employees while ensuring compliance with new regulations.

Source: Quarles.com, November 2024

End of The Year Tips for 401k Plan Sponsors

As we transition from Thanksgiving to the holiday season and prepare for the New Year, retirement plan sponsors must focus on year-end planning for their plans. This article emphasizes the fiduciary responsibility of sponsors to review and enhance their retirement plans in anticipation of the upcoming year. For detailed information and guidance on maintaining and improving retirement plans, please refer to the full publication.

Source: Jdsupra.com, November 2024

Agencies Release 2024 Form 5500 Series With Minimal Changes

The agencies have released the 2024 Form 5500 series, including Form 5500, Form 5500-SF, Form 5500-EZ, and their instructions, with minimal changes mostly concerning retirement plans. Key highlights include: 1. Pension-Linked Emergency Savings Accounts: A new plan characteristics code (2Y) has been added for these accounts, which are available for plan years beginning in 2024. Plans offering this feature must include the code on Form 5500 (line 8a) or Form 5500-SF (line 9a). 2. Form 5558 for DCG Filing: Defined contribution group (DCG) plan administrators can file a single Form 5558 to request an extension for Form 5500 without needing to attach a list of participating plans.

Source: 401khelpcenter.com, November 2024

Who Can Make Additional 401k Catch-up Contributions Under the SECURE 2.0 Act?

The SECURE 2.0 Act allows for enhanced catch-up contributions for older participants in 401k plans starting in 2025. Specifically, participants aged 60 to 63 will be able to contribute the greater of $10,000 or 150% of the standard catch-up limit for 2024 ($7,500, indexed for inflation). In 2025, this means the maximum catch-up contribution for older participants will be $11,250.

Source: 401khelpcenter.com, November 2024

DOL Initiates Data Collection to Reunite Workers With Lost Retirement Savings

The DOL has begun efforts to create the Retirement Savings Lost and Found database, an online tool to help workers locate lost retirement benefits. Starting Monday, plan administrators, recordkeepers, and service providers are invited to voluntarily submit data to help populate the database, which is expected to launch by December 29. The EBSA has issued a request outlining the necessary data elements and submission methods, highlighting the importance of collaboration between the government and the retirement plan community for the tool's success.

Source: Planadviser.com, November 2024

DC Plan Sponsors and Forfeiture Lawsuits Webinar: What You Need to Know

In a recent webinar hosted by NEPC's Dan Beaton and Groom Law Group's Jennifer Eller, the discussion focused on the surge of lawsuits involving defined contribution plan forfeiture accounts. They explored the allowed uses of forfeitures and offered strategies for plan sponsors to minimize the risk of litigation in this area. The replay of the webinar is available here.

Source: Nepc.com, November 2024

Avoiding 401k Problems With Former Employees

The author reflects on his experience as a former employee to explain why his employer avoided hiring staff for their law firm. Additionally, his employer identified a potential liability risk for 401k plan sponsors involving former employees who still have account balances in the plan. To minimize this risk, the author recommends encouraging these former participants to roll over their balances or cash them out if they qualify under the cash-out provision. For more details, the full publication is available here for review.

Source: Jdsupra.com, November 2024

Form 1099-R Distribution Codes for Defined Contribution Plans

Form 1099-R must be issued by January 31 of the year following the distribution. The accompanying image outlines the most commonly used boxes on the form and provides explanations specifically for distributions from defined contribution plans.

Source: Dwc401k.com, November 2024

IRS Releases Guidance on Overpayments From 401k Plans

On October 15, 2024, the IRS issued Notice 2024-77, which outlines new rules for correcting overpayments from retirement plans, including 401k plans, under the SECURE 2.0 Act. This guidance clarifies situations in which plan sponsors can correct inadvertent benefit overpayments made to participants without needing to recoup those amounts or make corrective payments, a shift from the previous requirement that sponsors attempt recoupment to avoid potential plan disqualification.

Source: Compliancedashboard.net, November 2024

The Basics of New Comparability Plans

New comparability plans are qualified defined contribution plans that allow employers to allocate varying profit-sharing contribution percentages to different employee groups. These plans enable higher contributions for owners and highly compensated employees while minimizing contributions for other staff. However, they must pass discrimination tests that assess the retirement benefits equivalent to the contributions made. These plans are particularly effective when there is a significant disparity in compensation or age between favored employees and the rest of the workforce.

Source: Belfint.com, November 2024

The Challenges of Census Data in Non-Discrimination Testing: Why Uniformity Remains Elusive

Each year, 401k Plan Sponsors must compile a detailed employee census for non-discrimination testing, a process that can be frustrating and prone to errors related to data consistency and accuracy. Auditors often find discrepancies between census data and payroll records, highlighting the need for careful data management. Despite the requirement for NDT across all plans, there is no standard format for census reports, primarily due to various challenges that prevent uniformity in payroll systems.

Source: 5500audit.com, November 2024

Fred Reish on Things I Worry About: Automatic Enrollment - Part 2

The SECURE Act 2.0, enacted on December 29, 2022, mandates that new 401k and private sector 403b plans automatically enroll eligible employees starting in the plan year after December 31, 2024. This article focuses on the effective date as pertaining to the 2025 calendar year, which is approaching. It highlights two specific issues related to automatic enrollment: the determination of "which" eligible employees will be automatically enrolled and the inclusion of long-term, part-time employees in this requirement.

Source: Fredreish.com, November 2024

How to Improve 401k Plan Fee Disclosures

Congress sought the Government Accountability Office's evaluation of 401k plan fee disclosures, which found that participants largely do not read or understand these disclosures. The Department of Labor's 2010 initiative to mandate quarterly fee disclosures has been ineffective, as many participants remain unaware of their fees. The GAO report suggests there may not have been a need for these separate disclosures, given the availability of account information online. Instead, the DOL could enhance regular account statements with clear, concise, standardized fee information, removing complex language to improve participant understanding. The article provides three suggestions to improve fee disclosures.

Source: Encorefiduciary.com, November 2024

IRS Guidance: How Reliable Is It?

Federal agencies translate legislation affecting defined contribution plans into guidance, with the IRS focusing on tax laws and the DOL on labor laws. The IRS provides crucial guidance that helps plan sponsors, fiduciaries, and participants to effectively implement tax-preferred savings options. This framework is essential, as it reduces uncertainty surrounding new laws such as the SECURE Act of 2019, the CARES Act of 2020, and SECURE 2.0 from 2022, ensuring these legislative changes are practical and beneficial.

Source: Callan.com, November 2024

New Permissible Minimum Service Requirements for 401k and 403b Plans

The SECURE Act, signed into law on December 20, 2019, followed by SECURE Act 2.0 on December 23, 2022, introduced several changes to 401k and 403b plan requirements. One significant change pertains to minimum service requirements for participation in 401k plans, allowing sponsors to set criteria that help streamline administration by excluding part-time employees with minimal participation history. This is aimed at reducing the administrative burden associated with managing small accounts. Meanwhile, 403b plans must provide universal eligibility but can exclude employees working less than 20 hours per week for similar administrative efficiency reasons.

Source: Berrydunn.com, November 2024

Retirement Plan Disaster Relief

Recent news highlights the increasing frequency of natural disasters across the United States, affecting many people. Although these catastrophes cannot be prevented, the SECURE 2.0 Act has made it easier for retirement plan participants to access their savings after such events. This federal legislation allows retirement plan sponsors to provide greater access to funds following a federally recognized disaster, streamlining the previous process which required individual congressional measures for each disaster. Once a major disaster is declared by the President, relief options become available for approximately six months, allowing individuals in the affected areas who have suffered economic losses to access their retirement savings.

Source: Legacyrsllc.com, November 2024

SECURE 2.0 2025 Catch-Up Contribution Increase

The SECURE 2.0 Act of 2022 introduced changes to catch-up contributions under the Internal Revenue Code that have delayed effective dates. Notably, Section 109 increases the limit on catch-up contributions, effective for tax years beginning January 1, 2025. A second provision requires that catch-up contributions for employees earning over $145,000 in FICA wages be made as Roth contributions. Initially set to begin on January 1, 2024, this requirement has now been postponed to January 1, 2026, pending IRS guidance. Currently, catch-up contributions from higher-paid employees do not need to be made as Roth contributions.

Source: Ferenczylaw.com, November 2024

Retirement Plan Amendments and 2024 Year-End Action Items

The notice advises plan sponsors to prepare for 2024 IRS year-end amendments and outlines key action items. This includes amendments related to qualified plans, catch-up contributions under the SECURE Act 2.0, and the IRS final rule regarding required minimum distributions after death. The advisory emphasizes upcoming deadlines for amending qualified retirement plans and encourages plan sponsors to review other important considerations.

Source: Alston.com, November 2024

What Are the Consequences of Excess Deferrals? IRS Offers a Look

When a participant makes excess deferrals to a 401k plan, there are significant implications, as detailed by the IRS in their Issue Snapshot. The IRS outlines the limitations on elective deferrals, their treatment under tax law, and the implications related to catch-up contributions under IRC Section 414(v). Excess deferrals can lead to increased income tax liability for participants, and if mismanaged, could jeopardize a plan's qualified status. The IRS also provides guidance for employers and plan sponsors on how to audit elective deferrals effectively.

Source: Asppa-net.org, November 2024

IRS Announces 2025 Retirement Plan Limits

On November 1, 2024, the IRS announced that the contribution limit for 401k plans will increase to $23,500 for 2025, up from $23,000 in 2024. Additionally, the IRS provided technical guidance on cost-of-living adjustments impacting pension plans and other retirement-related items for tax year 2025 in Notice 2024-80.

Source: 401khelpcenter.com, November 2024

IRS Announces 2025 Cost of Living Adjustments to Various Retirement Plan Limits

The IRS has announced cost-of-living adjustments for retirement plan limitations effective January 1, 2025. While inflation rates have stabilized, resulting in modest increases, these adjustments are still welcomed. The updated limits include slight increases in the 415 and 402(g) limits, as well as new limits for additional catch-up contributions for participants aged 60-63 and deferral limits for Starter 401k Plans.

Source: Ferenczylaw.com, November 2024

How Are Plans Handling Missing Participants?

The article addresses the difficulties plan administrators encounter in locating missing participants and distributing their plan balances, especially for terminated employees. Although there are no specific regulations from the DOL regarding this issue, plan sponsors are expected to show a reasonable effort to distribute funds to these individuals. A survey conducted by the Plan Sponsor Council of America in September 2024 revealed insights from 234 plan sponsors across various sectors about their strategies for managing missing participants and small plan balances. Will Hansen, the Executive Director of PSCA, noted that this concern is prevalent among plan sponsors, who allocate considerable time and resources to the issue. The survey aims to highlight current trends and practices in addressing these administrative challenges.

Source: Ntsa-net.org, October 2024

Consequences to a Participant Who Makes Excess Deferrals to a 401k Plan

IRC Section 402(g) limits the amount of elective deferrals a participant may exclude from taxable income in a calendar year. This IRS "snapshot" examines the consequences to a participant who makes excess elective deferrals to a 401k plan.

Source: Irs.gov, October 2024

Four SECURE 2.0 Provisions Plan Sponsors Are Likely to Add

Fidelity Investments surveyed 2,000 clients to assess interest in the optional provisions of the SECURE 2.0 Act among plan sponsors. The survey highlighted the top four provisions that plan sponsors are keen to adopt. They are outlined in this article. It also indicated that smaller plan sponsors are likely to have the lowest adoption rates due to the increased complexity of implementing each new provision.

Source: Consultrms.com, October 2024

SECURE 2.0 Act: Provisions for Implementation in 2025

The SECURE 2.0 Act introduced several sweeping changes to how Americans can use retirement savings plans. Some provisions have already taken effect, while others are scheduled for implementation in 2025 and beyond. Financial advisors and plan sponsors should be aware of these upcoming provisions, as many will require a decision on whether to opt in or out. This article provides a summary of the key changes for 2025 that financial advisors and plan sponsors need to know.

Source: Consultrms.com, October 2024

Federal Data Crackdown Poses Risks to 401k Student Loan Match

The article discusses potential risks associated with a federal crackdown on data privacy that could impact 401k plans and student loan matching programs. As the government enhances scrutiny on how employers manage and share employee data, companies may face challenges in offering benefits connected to loan repayment. This increased regulation might lead to complications for programs designed to match student loan payments with 401k contributions, potentially affecting the financial well-being of employees reliant on these benefits.

Source: Bloomberglaw.com, October 2024

DOE Regulations Could Interfere With the Student Loan Match, Industry Warns

The article discusses potential issues arising from new Department of Education regulations that may interfere with student loan matching programs. Industry experts warn that these regulations could complicate or negatively impact efforts to help employees manage student loan debt, particularly regarding employer-sponsored assistance programs. Concerns include the potential for increased administrative burdens and reduced participation in these beneficial programs, ultimately affecting employees' financial well-being. The article emphasizes the need for a careful balance between regulatory compliance and effective support for those managing student loans.

Source: Psca.org, October 2024

ERISA Row Related to How Employers Use 401k Forfeitures Deepens

Since last fall, plaintiffs have initiated over twenty ERISA class actions alleging breaches of fiduciary duties concerning 401k plan forfeitures. Despite existing guidance from the Treasury Department and the Department of Labor, this new legal theory is gaining traction. Two preliminary rulings have permitted these forfeiture claims to advance, further encouraging this trend. However, two recent decisions, one addressing fiduciary discretion and the other exploring the limits of ERISA, provide valuable insights and nuanced discussions on the issue.

Source: Nixonpeabody.com, October 2024

DOL, Treasury Rules to "Heat Up" This Fall: Senior DOL Official

During a session at the ASPPA Annual Conference on September 22 in Orlando, key figures from the DOL and Treasury discussed regulatory priorities using sports metaphors. Jeff Turner and Kyle Brown provided insightful updates on topics like the fiduciary rule, LTPTE, ESOPs, and Form 5500 modernization. Turner advised the audience to remain engaged with the evolving status of the Retirement Security Rule, indicating more developments were on the horizon.

Source: Napa-net.org, October 2024

How Long Must We Store our 401k Records?

As regulatory complexities grow, maintaining detailed records for employee benefit plans is essential. The IRS and DOL have set guidelines for record retention, which apply directly to plan sponsors. While service providers may store some records, sponsors are still legally responsible for retaining all relevant documentation.

Source: Dwc401k.com, October 2024

How to Calculate Years of Service in your Retirement Plan

One of the most fundamental requirements in managing a qualified retirement plan is counting an employee's length of service. It is the basis for determining such items as plan eligibility, entitlement to company contributions, vesting, and even retirement itself. Although this seems like a straightforward task, the rules are quite complex and create traps for the unwary.

Source: Dwc401k.com, October 2024

How to Determine Eligibility for Your 401k Plan

Companies sponsoring retirement plans have considerable flexibility in defining eligibility criteria, but they must ensure that the plan documentation aligns with their goals. There are four key variables to consider. Each of these factors needs careful consideration and precise wording in the plan documents to effectively reflect company objectives.

Source: Dwc401k.com, October 2024

Back-to-School Special: IRS Offers Insight on Implementing Qualified Student Loan Payments

On August 19, 2024, the IRS released Notice 2024-63, offering guidance on implementing Section 110 of the SECURE 2.0 Act of 2022. This section allows employers with 401k or 403b plans to make matching contributions based on employees' student loan payments. The Notice addresses key topics such as eligibility rules, employee certification, nondiscrimination testing, and other administrative procedures through a series of questions and answers. This article is an in-depth look.

Source: Mwe.com, October 2024

What to Know About the New RMD Rules

The SECURE Act passed in late 2019, altered the Required Minimum Distribution rules for account holders and most non-spouse beneficiaries. In 2022, the IRS issued proposed interpretations of these regulations. After a two-year wait, the final regulations have now been released, confirming most of the initial proposals and introducing additional new rules.

Source: Manning-Napier.com, October 2024

Avoid an IRS Audit Surprise by Checking These Areas of Your 401k Plan

When notified of an impending IRS audit for a 401k plan, it's crucial to take proactive steps rather than remain inactive. Collect all requested materials and review your 401k plan for potential errors. Conducting a mock audit with an ERISA attorney and your third-party administrator can help identify and correct any significant issues before the official audit takes place.

Source: Jdsupra.com, October 2024

The Trouble With True-ups: Make Sure You Budget for the Maximum Match

Employers that give substantial bonuses tend to allow their employees to contribute the maximum 401k or 403b deferral amount out of their bonus pay. To ensure that employees who take advantage of this flexibility get the maximum match, the employers have to make sure that their plan document has a true-up match provision. There's also a lesson to be learned by employers who don't like surprises.

Source: Belfint.com, October 2024

IRA and Employer Plan Disaster Relief

Congress has equipped the IRS with more sweeping authority to respond to disasters without having to wait for legislative action. The SECURE 2.0 Act permanently allows plan participants to take penalty-free distributions and to borrow more from their retirement savings when a major disaster has been declared by the President. This article summarizes current federal disaster relief guidance.

Source: Ascensus.com, October 2024

Required Minimum Distributions

As we approach the end of the calendar year, it is important to be reminded about one frequently overlooked retirement plan requirement. Upon attainment of age 73, certain participants of a tax-qualified retirement plan may be required by federal tax law to withdraw a minimum amount from such plan each year. These mandatory distributions are known as "required minimum distributions."

Source: Legacyrsllc.com, October 2024

401k Student Loan Match Perk Hindered by Employer Hesitation

While offerings from administrators like Betterment, Fidelity, and SoFi have already been marketed as services to facilitate matching for student loan payments, plan sponsor uptake appears to be lagging. Companies have been slow to offer an enticing new perk because of compliance and logistical concerns even as the IRS cleared the way for employers to provide the benefit.

Source: Wagnerlawgroup.com, October 2024

The Final RMD Regulations: The High Points

The good news is that the final RMD rules did not make major changes to the 2022 proposed regulations. But there are important refinements and clarifications, and, of course, discussion of many of the SECURE 2.0 RMD changes that Congress passed after the Treasury released the proposed regulations. This article highlights some of the most important changes.

Source: Ferenczylaw.com, October 2024

IRS Ruling on 401k Discretionary Contributions

On August 23, 2024, the IRS gave its approval to a novel arrangement in which employees participating in their employer's 401k plan would be permitted to elect to allocate certain employer discretionary contributions made under such plan among various other types of employee benefits offered by the employer. The IRS determined that, as long as specified conditions are met, the proposed arrangement would not cause the various plans to run afoul of the Internal Revenue Code rules applicable to the plans.

Source: Compliancedashboard.net, October 2024

DOL vs. IRS Rules: Courts Asked to Decide How 401k Plans Can Use Forfeiture Assets

What started as a small law firm filing a handful of suits against 401k plans' use of forfeited funds has metastasized into a broad attack on sponsors that raises questions about reducing participants' expenses. It's a trend of law firms filing more lawsuits seeking to use DOL regulations regarding fiduciary duty to supersede IRS rules. The eruption of lawsuits has been accompanied in the early stages by divergent federal court decisions that don't give plan sponsors -- and their ERISA attorneys -- a clear picture of how to defend against this type of lawsuit.

Source: Wagnerlawgroup.com, September 2024

IRS Addresses Matches for Qualified Student Loan Payments

The SECURE 2.0 Act gave plan sponsors of certain DC plans the ability to make matching contributions when workers make qualified student loan payments on qualified educational loans. The IRS has issued interim guidance that applies to 401k, 403b, and governmental 457b plans as well as SIMPLE IRAs. The interim guidance is effective for plan years beginning after December 31, 2024.

Source: Segalco.com, September 2024

Chevron Explained

On June 28, the U.S. Supreme Court issued its decision in Loper Bright Enterprises v. Raimondo. The court overruled its own 1984 holding in Chevron v. Natural Resources Defense Council, in which it stated that the federal courts, in many cases, should defer to agency interpretations of ambiguous federal statutes. Here, ERISA expert David Kaleda unpacks the Supreme Court decision that gives the courts more weight in areas that include employee benefits law.

Source: Planadviser.com, September 2024

A Brief Guide to Qualified Disclaimers for Retirement Plan Administrators

A "qualified disclaimer" is a tax-effective way to refuse a transfer of property that would otherwise occur on someone's death. From time to time, retirement plan administrators may be contacted by a beneficiary who wants a deceased participant's benefit to go to a contingent beneficiary or the participant's estate. The way to make that happen is a qualified disclaimer.

Source: Verrill-law.com, September 2024

2025 401k Contribution Limits: Milliman Halves Its Increase Prediction

It's looking like retirement savers will only see a $500 increase in the amount they can contribute to their 401k, 403b, or 457 plans in 2025, according to the newly updated final forecast for the 2025 IRS contribution limits from Milliman. For 2024, the elective deferral limit was also increased by $500 compared to 2023.

Source: 401kspecialistmag.com, September 2024

IRS Issues Guidance on Retirement Matches for Student Loan Payments

Employers now have some clarity around a new program that allows them to match retirement plan contributions to employees' student loan payments. The IRS on Aug. 19 released long-awaited interim guidelines regarding the program, a provision under SECURE ACT 2.0 that allows employers with 401k, 403b, governmental 457b, or SIMPLE IRA plans to match employees' student loan payments like they would for traditional retirement contributions. The provision took effect this year, but employers have been waiting for more guidance around the new program.

Source: Shrm.org, September 2024

Federal Regulators Seek Comments on Saver's Match Contributions

The IRS put out a request for comments on issues related to the SECURE Act 2.0 provision that creates a federal Saver's Match, under which the federal government would contribute up to $2,000 annually to an individual's defined contribution plan or individual retirement account. The Saver's Match, scheduled to begin in 2027, would replace the Saver's Credit, a nonrefundable tax credit. It is intended to increase retirement savings for low-to-moderate-income Americans.

Source: Planadviser.com, September 2024

DOL Seeks to Streamline PTE Process With Updated Procedures

Updated DOL procedures for handling requests for prohibited transaction exemptions require more detailed disclosures from ERISA plan sponsors. The final rules also enhance the agency's scrutiny of independent fiduciaries and appraisers hired to safeguard plans and their participants. Although service providers may also seek PTEs, this article focuses on aspects of the final rules most relevant to sponsors.

Source: Mercer.com, September 2024

NAGDCA Explains How to Offer a Self-Directed Brokerage Window

While brokerage windows offer retirement plan participants expanded investment choices, fiduciaries must navigate a complex landscape of provider selections, fee structures, and investment parameters to ensure compliance with their responsibilities, according to the National Association of Government Defined Contribution Administrators. When considering the addition of a brokerage window, NAGDCA recommended that plan fiduciaries pay careful attention to these key factors, which are reviewed here.

Source: Planadviser.com, September 2024

Long-Term Part-Time Eligibility Provisions -- 2025 Edition

Everyone is now an expert on how to apply the "long-term part-time employee" provisions of the SECURE Act which became effective at the beginning of this year. Unfortunately, it is now time to "adjust" that knowledge in anticipation of certain impending changes to the LTPT rules. This is because, while the SECURE Act established the LTPT rules that became required for most plan sponsors on January 1, 2024, subsequent retirement plan legislation commonly referred to as "SECURE 2.0" modified and expanded the LTPT rules. This article discusses those changes to the LTPT rules as imposed by SECURE 2.0.

Source: Legacyrsllc.com, September 2024

Major SECURE 2.0 Guidance Issued: Extra Credit for Repaying Qualified Student Loans

On August 19, 2024, the IRS issued Notice 2024-63 providing guidance for plan sponsors that wish to provide matching contributions based on eligible student loan repayments made by participants, rather than based only on elective deferrals, pursuant to the SECURE 2.0 Act of 2022. This article summarizes guidance under the Notice.

Source: Beneficiallyyours.com, September 2024

Interim Guidance on Matching Qualified Student Loan Payments

Until recently, employer matching contributions under qualified plans were required to be conditioned solely upon employee contributions made to the plan. However, one of the many changes enacted by the SECURE 2.0 Act enabled certain qualified plans to condition employer matching contributions on employees' qualified student loan repayments. The IRS recently released Notice 2024-63, which provides interim guidance related to the administration of such loan repayment matching programs.

Source: Pbwt.com, September 2024

IRS Releases Guidance on Matching Contributions for Qualified Student Loan Payments

The IRS released Notice 2024-63, regarding employer matching contributions for "qualified student loan payments" made by employees participating in 401k plans. The SECURE 2.0 Act of 2022 permits plans that include matching contributions to provide such contributions based on certain student loan payments, as opposed to basing them exclusively on elective deferrals. This is a short overview.

Source: Compliancedashboard.net, September 2024

Final Warning: Distributions to Beneficiaries Must Begin in 2025

The complexity of the RMD rules and subsequent proposed and final regulations has created confusion in administering plan provisions. The IRS has given qualified plan beneficiaries relief from the excise tax through 2024 and has also put plan sponsors on notice that RMDs must be administered correctly going forward.

Source: Brickergraydon.com, September 2024

IRS Issues Interim Guidance on Matching Contributions Made on Account of Qualified Student Loan Repayments

Starting in 2024, the SECURE 2.0 Act allows employers to make matching contributions to 401k, 403b, and governmental 457b plans, and SIMPLE IRAs on account of employees' qualified student loan payments. Many plan sponsors have deferred implementation of QSLP matches pending IRS guidance, and on August 19, 2024, the IRS issued Notice 2024-63, which provides that interim guidance in a question-and-answer format. It addresses discrete issues of eligibility, annual certification, ADP testing, and reasonable procedures to administer a plan with a QSLP matching feature.

Source: Wagnerlawgroup.com, August 2024

IRS Issues Guidance Regarding Matching Contributions Based on Eligible Student Loan Payments in Qualified Retirement Plans

The IRS issued Notice 2024-63 guiding qualified retirement plans that implement matching contributions based on an employee's qualified student loan payment. Notice 2024-63 is in question-and-answer format, illustrating several plan administrative issues in various examples. This is a three-page review of the guidance.

Source: Voya.com, August 2024

Employers Now Have Interim Guidance on Student Loans and Retirement Plans

The IRS provided interim guidance to employers that provide matching retirement plan contributions based on student loan payments, a new benefit courtesy of a 2022 law. Notice 2024-63 implements Section 110 of the SECURE 2.0 Act of 2022. It applies to sponsors of 401k and similar retirement plans that provide matching contributions based on eligible student loan payments made by their participating employees.

Source: Thetaxadviser.com, August 2024

Final and New Proposed RMD Regulations Issued

On July 19, 2024, the IRS and the Department of Treasury released both final regulations and proposed regulations for compliance with the RMD rules. This article focuses on important developments under these final regulations and proposed regulations that impact administrators and participants/beneficiaries of qualified plans (both defined benefit and defined contribution), 403b plans, and 457b plans.

Source: Icemiller.com, August 2024

IRS Issues Proposed Required Minimum Distribution Regulations

On July 19, 2024, the IRS bestowed upon us two pieces of "light" reading on required minimum distributions. One was the final regulations to Internal Revenue Code 401(a)(9), a mere 290 pages. The other guidance was the proposed RMD Regulation, which expounds on several of the components of the SECURE 2.0 Act of 2022 impacting RMDs. That is the subject of this article.

Source: Ferenczylaw.com, August 2024

IRS Releases Guidance on Retirement Plan Student Loan Matching

On August 19, 2024, the IRS released Notice 2024-63, providing much-anticipated guidance on employer retirement plan contributions as they relate to qualified student loan payments (QSLPs). This notice provides important clarification for plan sponsors who are considering adding matching student loan payments to their retirement plans.

Source: Captrust.com, August 2024

Catch-Up Contributions Must Exceed Some Limit

What's the Catch? Catch-up contributions are not subject to discrimination testing. Misclassification of regular deferrals as catch-up contributions affects the results of the discrimination testing. If the ADP test passes with ample margin, or the plan is a safe harbor plan, this contribution classification error may not have much impact. However, if the test passes by a hair or if the test fails, then having included the misclassified catch-up contributions would yield a different result.

Source: Belfint.com, August 2024

Domestic Abuse Withdrawal Penalty Exception

Can a client's 401k plan, which requires spousal consent for distributions, be amended to adopt the new domestic abuse victim distribution option? SECURE Act 2.0 provides a new exception to the 10 percent additional tax on early withdrawals for domestic abuse victim distributions. But, such distributions may not be part of defined benefit plans or defined contribution plans that are subject to the spousal consent rules.

Source: Retirementlc.com, August 2024

IRS Issues Notice on Certain Exceptions to the 10 Percent Additional Tax Under Section 72(t)

The IRS recently issued Notice 2024-55, which concerns exceptions to the 10% additional tax under section 72(t) of the Internal Revenue Code. These exceptions include emergency personal expenses and domestic abuse victim distributions from qualified retirement plans.

Source: Hallbenefitslaw.com, August 2024

Nordstrom Nailed With Massive Allegations in 401k Fiduciary Breach Suit

The plaintiffs' bar has picked up on a new angle with a new suit combining allegations of excessive 401k fees, un-personalized (and overpriced) managed accounts, and misuse of forfeitures. More specifically, the suit alleges that the fiduciaries of the $3.4 billion, 105,000 participant Nordstrom 401k Plan "failed to fulfill their fiduciary duties to prudently and loyally ensure the Plan's total recordkeeping and other administrative expenses were reasonable and not excessive, as well as engaged in self-dealing with regard to Plan forfeitures in violation of ERISA fiduciary prohibited transaction rules."

Source: Asppa.org, August 2024

401k Forfeiture Lawsuit Wave Still Splashing West Coast

August has been a hot month for retirement plan litigation particularly so in California, where a wave of recent misuse of forfeited funds lawsuits are mostly clearing the motion to dismiss hurdle. A California federal judge's recent decision not to dismiss a federal benefits lawsuit alleging Intuit misspent 401k plan forfeitures shows how a new pleading approach has gained traction in some district courts, despite recent guidance from the DOL and IRS about how plan sponsors have increased flexibility on how they can use forfeitures.

Source: 401kspecialistmag.com, August 2024

IRS Issues Guidance on Employer Matches of Qualified Student Loan Payments

The IRS on August 19th issued interim guidance concerning employer matching contributions made to retirement plans related to qualified student loan payments (QSLPs) made by employees. The guidance, which is in question-and-answer format, comes in Notice 2024-63. It addresses issues that may arise in 401k, 403b, governmental 457b, or SIMPLE IRA plans in administering such matching contributions.

Source: Asppa.org, August 2024

IRS Issues Guidelines on Retirement Matches for Student Loan Repayments

The IRS issued highly anticipated guidance for plan sponsors wanting to match retirement plan contributions to qualified student loan payments (QSLPs). Notice 2024-63, posted by the IRS, implements section 110 of SECURE 2.0, which allows employers to match contributions for employees based on their QSLPs.

Source: 401kspecialistmag.com, August 2024

How Employee Benefits Rules May Fare in the Post-Chevron World

The Supreme Court's long-awaited decision overruling its landmark 1984 decision in Chevron USA v. Natural Resources Defense Council, held that a court considering a federal agency's regulatory interpretation of a statute must follow the "best" reading of the statute, not just a "permissible" reading. This raises the bar for federal agencies, including those administering employee benefits laws. The decision has already affected ERISA litigation, as discussed here. This article also identifies some other potential effects.

Source: Wagnerlawgroup.com, August 2024

Employing the Proper Definition of Compensation

The DOL and IRS routinely report common operational failures that such agencies detect in the context of retirement plan audits and investigations. One of the operational failures that is always at or near the top of that list concerns plan sponsors failing to employ the correct definition of compensation. This article is intended to briefly highlight some of the issues that can occur when the incorrect definition of compensation is employed as well as explain some of the differences between the most commonly employed definitions of compensation.

Source: Legacyrsllc.com, August 2024

Coverage Rules for 401k and Other Qualified Plans: Average Benefit Test and the Minimum Participation Rule

This is the third in a series of articles designed to inform you of the significance of the so-called "coverage rules" and the "minimum participation rules" applicable to qualified retirement plans. This article finishes the discussion of the coverage rules by exploring: (a) the average benefit test; (b) the rules for aggregating and disaggregating plans for coverage testing purposes; and (c) the transition rule for certain business acquisitions and dispositions.

Source: Employeebenefitslawgroup.com, August 2024

When Are Those SECURE 2.0 Technical Corrections Coming?

Since a technical corrections discussion draft was distributed in December, there have not been any major legislative updates. This poses issues for plan sponsors in search of clarity on important provisions in the SECURE 2.0 Act of 2022 that need correction.

Source: Napa-net.org, August 2024

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