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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.

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SECURE 2.0 Guidance Process Begins: Self Correction for Eligible Inadvertent Failures Is First Up

The IRS has issued interim guidance to address the changes made by section 305 of SECURE 2.0 to the self-correction program under the IRS Employee Plans Compliance Resolution System. While the IRS will issue guidance completely restating the rules of EPCRS to reflect the new statutory changes within two years, Notice 2023-43 provides initial guidance, in question-and-answer format, regarding what qualification failures can be self-corrected now.

Source: Groom.com, June 2023

IRS Notice 2023-43: Self-Correction Changes From SECURE 2.0 Are Immediately Effective

On May 25, 2023, the IRS issued Notice 2023-43, which provides interim guidance on the interpretation and application of Section 305 while the updated EPCRS procedure is pending. And it contains good news.

Source: Ferenczylaw.com, June 2023

401k Safe Harbor Rules - 2023

A description of the 401k safe harbor rules, updated for 2023, as well as an explanation of the advantages and disadvantages of this plan design option.

Source: Consultrms.com, June 2023

The New Roth Catch-up Requirement Needs Clarification: What Are Plan Sponsors to Do?

Beginning in 2024, SECURE 2.0 significantly changes the rules for catch-up contributions. Although the majority of non-governmental plans already permit Roth contributions, there is no precedent for this new requirement and a great deal of confusion about plan sponsor options for compliance.

Source: Cohenbuckmann.com, June 2023

Decoding IRS Notice 2023-43: Easier 401k Error Fixes

IRS Notice 2023-43 was released on May 25, 2023, and provides guidance on changes stemming from Section 305 of the SECURE 2.0 Act of 2022. This part of the law is about the Employee Plans Compliance Resolution System. The EPCRS helps Plan Sponsors fix mistakes in employee benefit plans, like mistakes identified during 401k plan audits. This article discusses the main differences that IRS Notice 2023-43 introduces compared to the existing rules before the SECURE 2.0 Act.

Source: 5500audit.com, June 2023

New 401k Audit Rule for Form 5500 is Good News for Small Businesses

401k plans must be audited by an independent qualified plan auditor if they are considered a 'large plan' for Form 5500 reporting purposes. Recent DOL changes to Form 5500 will allow plans to count fewer participants when determining the need for an audit. The DOL expects the change to eliminate the audit requirement for 20,000 small business 401k plans, good news when you consider the cost, time, and effort of an audit for employers.

Source: Employeefiduciary.com, May 2023

Proposed Regulations on Allocation of Forfeitures

The IRS issued proposed regulations to address the proper timing and use of allocation of forfeitures. The proposed regulations are effective with the 2024 plan year and provide invaluable transition relief for unallocated forfeitures. Here, Groom's Elizabeth Dold and David Levine, review the existing forfeiture rules and the new proposed rules for defined benefit and defined contribution plans.

Source: Groom.com, May 2023

Safe Harbor 401k: 2023 Guide for Employers

This article covers the highlights of a white paper, 2023 Definitive Guide to Safe Harbor 401k Plans, which covers everything you need to know about Safe Harbor 401k plans, including how tax credits can cover employer costs and a discussion of employer contributions for the first few years.

Source: Forusall.com, May 2023

Required Annual DC Plan Tests - 2023

Sometimes not all of the various tests and limitations applicable to these plans have been checked in prior years. This article summarizes eight tests that are required annually. It's not uncommon for a plan to be subject to a half dozen or more of these tests.

Source: Consultrms.com, May 2023

IRS Gets Its Act Together for Forfeiture Rules

The issuance by the IRS of proposed regulations on the use of forfeitures in qualified retirement plans provides some welcome clarity, regulatory house cleaning, and relief for plan sponsors. With a proposed effective date of January 1, 2024, these regulations should prompt plan sponsors to review their plan language and procedures for compliance and to consider plan amendments to take advantage of the new rules.

Source: Benefitslawadvisor.com, May 2023

SECURE 2.0 Encourages Employers to Expand Employee Benefits

401k plans are moving away from serving as voluntary retirement savings vehicles and towards a future where plans are mandatory and serve as a financial backstop to more than just retirement. The changes enacted by SECURE 2.0 show that this transition is picking up speed. It is going to be important for HR professionals to be ready for these changes, as retirement plans are increasingly no longer voluntary and no longer just for retirement.

Source: Groom.com, May 2023

DOL Offers Some Good News for Smaller Businesses With 401k Plans

It's not often that business owners get good news from the government, but small and even some medium-sized businesses with 401k plans got a helping hand from the DOL earlier this year when they eased the rules for identifying which 401k plans are required to have audited financial statements.

Source: Blankromeworkplace.com, May 2023

SECURE 2.0: Required Minimum Distributions

Individuals who turn age 72 after December 31, 2022, and who reach age 73 before January 1, 2033, have a compulsory RMD age of 73. So, what does that mean? Individuals who turn 73 during 2023 must take an RMD for 2023 by April 1, 2024, but individuals who turn 72 during 2023 do not have to take an RMD until 2024, the year they turn 73, which means they can wait until April 1, 2025.

Source: Belfint.com, May 2023

Long Term Part-Time Employee Eligibility: Are You Ready?

SECURE 2.0 seems to be the primary focus of everyone in the retirement plan industry these days. However, it is important to remember that some aspects of the "original" SECURE Act are extremely impactful and have not yet become effective. This article is focused on one such issue that will dramatically alter eligibility for 401k plans.

Source: Legacyrsllc.com, May 2023

Important Alert for 401k and 403b Plans That Do Not Allow Participants to Make Roth Contributions

SECURE 2.0 made an important change to the rules regarding catch-up contributions. Under the new rules, catch-up contributions must be made as after-tax Roth contributions if the participant contributing earned more than $145,000 in FICA wages from the employer sponsoring the plan in the prior calendar year. Moreover, if the Roth requirement applies to any participant, participants making under $145,000 must be permitted to make catch-up contributions as Roth contributions as well.

Source: Frostbrowntodd.com, May 2023

How to Conduct a Successful Retirement Plan Audit

In the retirement plan industry, conducting regular audits is essential to ensuring compliance and optimizing plan performance. But how can you conduct a successful retirement plan audit and ensure you get the most value from the exercise? By following the tips outlined in this guide, you can plan your audit effectively.

Source: Multnomahgroup.com, April 2023

2023 Highly Compensated Employees: What You Need to Know to Pass Your Non-Discrimination Tests

That's because one of the primary duties of employers offering a 401k is to ensure that it's designed to benefit all employees, not just owners and highly paid employees. In 401k language, a plan with widespread benefits is non-discriminatory. A series of annual tests are used to decide whether or not a plan discriminates. If the plan fails a test, the company must take corrective action until the plan is no longer discriminatory.

Source: Forusall.com, April 2023

Plan Sponsors Have Lots to Prep for SECURE 2.0 Compliance

The sheer size of the Secure 2.0 Act of 2022, which has more than 90 provisions impacting workplace retirement plans, can make compliance feel overwhelming for many plan sponsors. But those provisions go into effect over 10 years, and most of them are optional, rather than mandatory, so the task of updating the plan design to comply may be more manageable than they expect.

Source: Plansponsor.com, April 2023

IRS Requires Most Employee Benefit Plans to File Electronically

The IRS has issued final regulations that will require almost all employee benefit plan filings to be made electronically.

Source: Wagnerlawgroup.com, April 2023

Clawbacks -- The Impact on 401k Plans

What the heck is a clawback? How does a clawback affect retirement plan contributions? This article will identify operational problems with incentive compensation clawbacks, review the impact on salary deferrals that have been deducted from that compensation and deposited to the plan (including associated employer matching contributions), and provide solutions to prevent operational headaches before they happen.

Source: Newfront.com, April 2023

DOL Provides Snapshot of ERISA Enforcement Statistics for Fiscal Year 2022

The Department of Labor's Employee Benefits Security Administration has released a fact sheet concerning its ERISA enforcement results for FY 2022. EBSA oversees 747,000 retirement plans, 2.5 million health plans, and 673,000 other welfare benefit plans, covering more than 152 million workers, retirees, and dependents.

Source: Hallbenefitslaw.com, April 2023

Navigating Top-Heavy 401k Tests: Everything You Need to Know in 2023

As a small business owner or HR manager, understanding the 401k top-heavy test is crucial for ensuring your retirement plan remains compliant and avoiding unnecessary penalties and fines.

Source: Forusall.com, April 2023

Secure 2.0 Creates an Important Opportunity to Improve Retirement Savings Portability

Recent policy reforms, including the passage of the SECURE 2.0 Act, provide an opportunity to significantly improve retirement savings portability to the benefit of participants, employers, and retirement plan providers. As policymakers and industry work to implement these reforms, it is worthwhile to look at the experience of other countries, including Australia, that shows it can be done.

Source: Georgetown.edu, April 2023

SECURE 2.0: Mandatory Automatic Enrollment Coupled With Corrective Contribution Relief

When it comes to choosing to save for retirement, people tend to be short-sighted. Many eligible employees don't choose to participate in their employer-sponsored retirement plans. Behavioral finance studies show that people tend to imagine themselves making the right choices in the future, not today. Procrastination. Inertia.

Source: Belfint.com, April 2023

What is Your Required Minimum Distribution Age

Is it, or will it be age 70 1/2, 72, 73, or 75? Required minimum distributions from qualified retirement accounts started with the passage of The Tax Reform Act of 1986. That law established the date when RMDs were required to begin as the year in which an individual reached age 70 1/2. This remained the compulsory age for RMDs for more than thirty years; however, the compulsory age has now changed twice in the space of three years.

Source: Orba.com, April 2023

IRS Proposes One-Year Limit on Use of Forfeitures in Defined Contribution Plans

The IRS recently issued proposed regulations that would require forfeitures in defined contribution plans to be used to offset employer contributions or pay reasonable plan administrative expenses, or otherwise be allocated to participants, by the end of the year following the year of forfeiture.

Source: Morganlewis.com, April 2023

How the SECURE 2.0 Act Will Impact Your Retirement Plan in 2025 and Beyond

It is no surprise that the SECURE 2.0 Act continues to dominate the headlines. While most provisions will take effect within the next two years, plan sponsors and service providers need to become familiar with the 2025 and later provisions so potential operational roadblocks can be addressed and changes can be quickly implemented when the deadline approaches.

Source: Tri-ad.com, April 2023

Suggested 402(f) Notice Changes Related to the SECURE 2.0 Act

This document contains suggested edits to the explanation required by Internal Revenue Code section 402(f), to reflect changes made to the Code by The SECURE 2.0 Act of 2022. This document was developed by the SPARK Institute's Government Relations Committee, in collaboration with the Committee of Annuity Insurers. The document uses the most recent safe harbor explanation contained in IRS Notice 2022-62 as a base.

Source: Sparkinstitute.org, April 2023

Where SECURE 2.0 Comes Up Short

Three months after the passage of the SECURE 2.0 Act of 2022, some observers are looking at the law and considering what SECURE 2.0 left out. Some items have been widely covered, such as the failure to include a provision permitting collective investment trusts in 403b plans. Some technical errors, such as accidentally banning catch-up contributions starting in 2024 have also been widely noted. But observers say some other major omissions from SECURE 2.0 have flown under the radar.

Source: Plansponsor.com, April 2023

Auditing Small Employer Retirement Plans

New rules change the method of counting participants for Form 5500 purposes, possibly both eliminating audits and allowing the use of the abbreviated Form 5500-SF.

Source: Beneficiallyyours.com, March 2023

Proposed Forfeiture Regulations Provide Clarity and Serve as a Helpful Reminder to Plan Sponsors

The IRS has proposed regulations to clarify the permissible uses of plan forfeitures in qualified retirement plans. This article provides insight into the types of benefit forfeitures permitted in qualified retirement plans, uses of those forfeitures under current law, the IRS's proposed regulations regarding the use of plan forfeitures, and the implications of the proposed regulations on qualified retirement plan sponsors and administrators.

Source: Bsk.com, March 2023

All ROBS Plans Must File a Form 5500

ROBS plans can be a terrific way to fund a new business. But, a ROBS company must make sure to operate the plan as a qualified retirement plan, with all the requirements that entail. One such task is the annual Form 5500 filing. Unfortunately, many professionals within the industry mistakenly tell ROBS owners that they don't need to file a Form 5500. This is incorrect. With limited exceptions, all qualified retirement plans must file a Form 5500 with the DOL each year.

Source: Klblawgroup.com, March 2023

Immediate Vesting Is Better for Recruitment Than Cliff Vesting Is for Retention

An Employee Benefit Research Institute research panel focused on employee tenure argued that non-immediate vesting schedules for employer matches are an overrated retention tool. An immediate vest is a smarter recruitment tool, and vesting thresholds can often be outweighed by accepting a higher-paying job elsewhere, according to the panelists.

Source: Plansponsor.com, March 2023

DOL Reopens Comment Period for QPAM Exemption

The DOL announced this week that it is reopening the comment period for proposed changes to the qualified professional asset manager exemption until April 6. The extension comes as the DOL says that at least one interested party may have additional information to provide that was not submitted by the previous January 6 comment deadline.

Source: 401kspecialistmag.com, March 2023

SECURE Act 2.0 Brings New and Improved Self-Correction Opportunities

With each program update, plan sponsors would benefit from additional opportunities to self-correct insignificant errors. When an error was not eligible for self-correction, plan sponsors could file a Voluntary Correction Program application. These were excellent alternatives, but it turns out, everything can always be better. SECURE 2.0's improved self-correction opportunities.

Source: Belfint.com, March 2023

IRS Issues Proposed Regulations Regarding Use of Forfeitures in Tax-Qualified Plans

Some of the IRS regulations dealing with tax-qualified plans predate ERISA and subsequent federal tax legislation and have become outdated. However, sometimes it takes IRS a long time to update its regulations to reflect current laws. On February 24, 2023, the IRS issued proposed regulations addressing one such outdated regulation.

Source: Wagnerlawgroup.com, March 2023

Secure 2.0: Treating Student Loans as Elective Deferrals

SECURE 2.0 was signed into law in December 2022 as part of the Consolidated Appropriations Act of 2023. Effective for plan years beginning after 2023, certain types of plans containing elective deferral features may choose to treat student loan payments as elective deferrals and make matching contributions on those amounts. These optional provisions are available to 401k plans, 403b plans, SIMPLE IRAs, and governmental 457b plans.

Source: Boutwellfay.com, March 2023

IRS Proposed Rule: Forfeitures in Retirement Plans

The IRS released a proposed rule on the use and timing of forfeitures in retirement plans. It was published in the Federal Register on February 27, 2023. The proposed regulation provides clarification of the use of forfeitures for retirement plans subject to the minimum funding requirements as well as the deadline for the use of forfeitures in DC plans.

Source: Pkfod.com, March 2023

Hardships Becoming Even Less Hard to Take

SECURE 2.0 has provided several opportunities for plan administrators to assist participants in tackling emergency expenses. Two of these provisions updated the administration of hardship withdrawals to plan participants.

Source: Graydon.law, March 2023

Plan Sponsors Spending Half Their 401k Time on Admin Work That Could Be Outsourced

Nearly 89% of advisors in a new survey said that plan sponsor clients are spending up to 50% of their time on retirement plan administrative work that could be outsourced. That's a key finding from a new study on "Advisor Attitudes Toward 3(16) Fiduciary Outsourcing" released this week by Pentegra.

Source: 401kspecialistmag.com, March 2023

Proposed Regulations on How to Use Forfeiture Accounts

On February 27, 2023, the IRS published proposed regulations on the use of forfeitures in qualified retirement plans. For DC plans, the regulations provide welcome clarity on what forfeitures can be used for and the date by which forfeitures must be used. In addition, they provide a helpful transition rule and, most importantly, serve as a reminder that forfeiture accounts must be used promptly to avoid an operational failure that will place the plan's tax-qualified status at risk.

Source: Verrill-law.com, March 2023

SECURE 2.0: Catch-up Changes and After-Tax Employer Contributions

SECURE 2.0 makes several important changes to catch-up and after-tax contributions in tax-qualified plans. Plan Sponsors will need to evaluate carefully how these changes affect their Plans. Although these changes may bring more opportunity and flexibility to participants, they may also bring challenges to the administration of catch-up and Roth contributions that did not exist before SECURE 2.0.

Source: Kilpatricktownsend.com, March 2023

Proposed IRS Regulations Make Handling Forfeitures Less Burdensome

The IRS issued proposed regulations regarding the use of forfeitures in qualified retirement plans, including 401k plans. The proposed regulations include a deadline for the use of forfeitures in defined contribution plans and clarify the purposes for which forfeitures can be used in a defined contribution plan. The regulations are proposed to apply for plan years beginning on or after January 1, 2024, but plan sponsors may rely on them in the interim.

Source: Graydon.law, March 2023

DOL Issues Final Rules on Changes to 2023 Form 5500

Plan sponsors must generally file 5500 forms on the last day of the seventh month after their plan year ends. The 2023 plan year reports, which will be filed beginning in mid-2024, include changes reviewed here.

Source: Eisneramper.com, March 2023

SECURE 2.0: Safe Harbor for Corrections of Employee Elective Deferral Failures

The SECURE 2.0 Act contains a provision that provides guidance on the correction method relating to automatic enrollment and automatic escalation failures.

Source: Schneiderdowns.com, February 2023

SECURE 2.0: Treatment of Student Loan Payments as Elective Deferrals for Purposes of Matching Contributions

Many employees have to choose between saving for their retirement or making payments on their student loans. Those employees may have a new way to accumulate retirement savings, thanks to a provision included in the SECURE 2.0 Act. Section 110 allows employers to treat qualified student loan payments as elective deferrals for the purposes of matching contributions.

Source: Schneiderdowns.com, February 2023

Change in Participant Count Methodology for Plan Audit Threshold

The DOL has amended the Form 5500 forms and instructions for 2023 and significantly changed how a plan sponsor counts participants for determining whether it is eligible for the small plan simplified Form 5500 reporting.

Source: Poynerspruill.com, February 2023

How Does the SECURE 2.0 Act Affect Qualified Distributions?

Experts from Groom Law Group and CAPTRUST answer questions about how the SECURE 2.0 Act modified Qualified Birth or Adoption Distributions, or QBADs.

Source: Plansponsor.com, February 2023

IRS Proposes Rules That Require Retirement Forfeitures Be Used in 12 Months

The proposal would more clearly define how plan administrators should handle money forfeited by participants when they leave an employer before the end of a vesting schedule, when they die, or when other factors result in funds going back to the plan sponsor. While the rule likely will not change how plan advisers and administrators are currently operating, it would make those processes clearer.

Source: Planadviser.com, February 2023

SECURE 2.0 Act: Provisions Related to Required Minimum Distributions

The legislation contains 92 provisions that are retirement plan related. Section 107 of the Secure 2.0 Act increases the age for Required Minimum Distributions from 72 to 73 and eventually up to 75. Here is a review of the details.

Source: Consultrms.com, February 2023

Startup Tax Credits Under SECURE 2.0: Easy Reading Version With FAQs

The enhanced startup credit is possibly the single highest impact provision of SECURE 2.0. The actual language of the provisions on startup tax credits is printed here but merged with the old law, cross-referenced, and formatted for easy reading. It is followed by answers to some frequently asked questions and a diagram for helping determine whether an employer is eligible for the credit.

Source: Groupplansystems.com, February 2023

Finding Balance With Form 5500

It's rare that updates to the Form 5500 warrant little more than a yawn, if anyone other than those who prepare the forms even notice. That is not the case with changes issued by the DOL today. In nearly 250 pages of new regulations, revised instructions and sample forms, the DOL announced some changes for the 2023 plan year that many will find to be a big deal.

Source: Dwc401k.com, February 2023

SECURE 2.0 Gives Long-Term Part-Time Employees Faster Access to 401k and 403b Plans

Among other things, SECURE 2.0 strengthens and expands the special 401k plan eligibility requirements for long-term part-time workers by shortening the eligibility service period for such workers and extending the application of the special rules to most 403b plans. Although these changes are effective for plan years beginning after December 31, 2024, plan sponsors must start tracking the service of long-term part-time workers much sooner than that to support compliance with the new rules.

Source: Verrill-law.com, February 2023

SECURE 2.0 Act: Cheat Sheet

On December 29, 2022, President Biden signed into law the "Consolidated Appropriations Act, of 2023," which included a major package of retirement savings provisions known as the SECURE 2.0 Act. As expected, the final package contained many of the same provisions included in the U.S. House and Senate bills that were previously considered. This is a 6-page summary with the effective dates of key provisions applicable to workplace plans.

Source: Troweprice.com, February 2023

DOL Best Practices for Missing Participant Searches

Employer-sponsored retirement funds can go unclaimed for many reasons. Regardless of the reason, unclaimed retirement accounts create an ongoing source of frustration for plan sponsors and fiduciaries. For the first time in several years, the DOL issued three pieces of guidance in January 2021 to assist fiduciaries in meeting their obligations regarding missing participants in ongoing plans.

Source: Penchecks.com, February 2023

Correcting "De minimis" 401k Plan Errors

Concerning a qualified retirement plan, de minimis errors are small amounts that are either erroneously deposited to a participant's account or that are erroneously distributed to a participant. While EPCRS provides a roadmap for correcting de minimis errors, it can be confusing to plan sponsors and practitioners. In other words, the directions are clear as mud.

Source: Newfront.com, February 2023

SECURE 2.0 Expansion of Self-Correction Program and Plan Loan Error Corrections

In a measure that substantively affects plan sponsors and alters retirement plan correction practices, SECURE 2.0 significantly expands the availability of self-correction by widening the range of operational failures for which self-correction is available, including plan loan errors.

Source: Spotlightonbenefits.com, February 2023

SECURE 2.0 RMD Change Could Cause Trouble in States With Certain Unclaimed Property Laws

The SECURE 2.0 Act of 2022 increased the required minimum distribution age for withdrawals from individual retirement accounts to 73 this year. In 2033, the RMD age will increase to 75. However, due to the escheatment, or unclaimed property, laws in certain states, some IRAs could be considered abandoned if they are left untouched until age 75.

Source: Plansponsor.com, February 2023

Puerto Rico Announces 2023 Limits on Qualified Retirement Plans

The Puerto Rico Department of the Treasury recently issued Internal Revenue Circular Letter No. 23-01 announcing the 2023 limits for Puerto Rico qualified retirement plans. This article reviews these new 2023 limits.

Source: Littler.com, February 2023

A Look at the IRS's New Employee Plans Audit Pilot Program

On June 3, 2022, the IRS announced a new 90-day pre-examination compliance pilot program. The program provides an avenue to streamline a retirement plan audit. This streamlined approach requires that plan sponsors address the specific audit issue raised in the IRS letter, as well as provide documentation that supports overall compliance. Importantly, failure to respond to the IRS letter will result in the IRS contacting the plan sponsor to schedule an exam. This article discusses facets of the program in a Q&A format.

Source: Groom.com, February 2023

SECURE 2.0: Emergencies, Hardships, and Disasters

Among the many changes within SECURE 2.0 is increased flexibility for participants to access certain retirement plan accounts when faced with qualifying emergencies, hardships, and disasters.

Source: Benefitslawadvisor.com, February 2023

Podcast: Employee Contribution Failures

A common failure is not following the participant's contribution election, or perhaps failing to auto-enroll a participant otherwise eligible. So how do employee contribution failures occur, and how are they typically corrected? How do the IRS correction procedures treat automatic deferral plans? This podcast looks at these pressing questions and more.

Source: Seyfarth.com, February 2023

Correcting Average Deferral Percentage Test Failures

The tax code governing 401k plans was written to prevent qualified retirement plans from overly favoring highly compensated employees. A series of non-discrimination tests were devised to measure whether a plan's design or operation tends to favor the HCEs over the non-highly compensated employees. This article dives into the different methods of correcting an ADP test failure.

Source: Legacyrsllc.com, February 2023

Ten Mandatory SECURE 2.0 Changes for 401k Plans

The SECURE 2.0 Act of 2022 contains over 90 provisions affecting retirement plans and IRAs, but only a handful are required changes for 401k plans. This post lists those changes and indicates when the provisions go into effect. Unless otherwise noted, 401k plans will need to be amended to reflect mandatory SECURE 2.0 changes by the end of their 2025 plan year. Some of the changes listed here, such as the paper disclosure requirement, may not require a plan amendment.

Source: Eforerisa.com, February 2023

Defined Contribution Plan and IRA Distributions Reconsidered

SECURE 2.0 made significant changes to the required minimum distribution rules. Several of those changes relax the basic RMD rules and reduce the penalties applicable when RMDs are not made. Other, more technical changes to the RMD and early distribution rules are intended to encourage the use of defined contribution plans and individual retirement account funds to purchase life annuities.

Source: Cohenbuckmann.com, February 2023

Dialing Up the Intensity of Missing Participant Searches

Understanding how (and when) to increase the intensity of a missing participant search is vital to fulfilling a plan sponsor's fiduciary duty to ensure that plan participants receive the retirement benefits that they're owed.

Source: 401kspecialistmag.com, February 2023

SECURE 2.0 Act: Optional Treatment of Employer Matching or Non-elective Contributions as Roth Contributions

Historically, employers were not permitted to provide employer matching or nonelective contributions in their 401k, 403b, and governmental 457b plans on a Roth basis. These types of employer contributions were allowed only on a pre-tax basis. Under a new provision of the SECURE 2.0 Act, effective immediately, plans may now allow participants to elect to receive matching and nonelective contributions on a post-tax basis.

Source: Schneiderdowns.com, January 2023

Secure 2.0's New QDRO Rules: The Mainstreaming of the QLAC?

The regs must be changed to reflect that if a QLAC is issued as a joint and survivor annuity (which it is required to be unless spousal consent is obtained, under plans to which such rules apply), and a divorce subsequently occurs before the date the annuity payments begin, the DRO "will not affect the permissibility of the joint and survivor annuity benefits" as long as that order meets several requirements.

Source: Businessofbenefits.com, January 2023

Annual Notice of Discretionary Match in Pre-Approved 401k Plans May Be Required Soon

Employers that provide 401k plans on documents that have been "pre-approved" by the Internal Revenue Service beware: there is yet another annual notice requirement that may need to be added to your compliance list.

Source: Ogletree.com, January 2023

Major SECURE 2.0 Error Puts Catch-Ups in Jeopardy

The American Retirement Association recently identified what it calls a "significant technical error" in the SECURE 2.0 Act of 2022 regarding catch-up contributions. Specifically, according to wording in the current legislation, beginning in 2024, no participants will be able to make catch-up contributions (pre-tax or Roth). That's the result of the elimination of a subparagraph in the body of the legislation to allow for a conforming amendment, but in the process inadvertently eliminated the ability to make any pre-tax catch-up contributions.

Source: Asppa.org, January 2023

User's guide to SECURE 2.0

Navigating SECURE 2.0 is a formidable challenge. The statute consists of 120 pages of text and 90 individual sections with no table of contents. To help employers and plan sponsors understand the legislation's implications, this guide provides a high-level summary of SECURE 2.0 provisions grouped topically including separate treatment of provisions specific to DC and DB plans. The six tables in this guide describe statutory changes and their effective dates, identify whether the changes are mandatory or optional for employers, and provide initial observations, including implementation challenges for which agency guidance would be helpful.

Source: Mercer.com, January 2023

Proposed IRS Regulations Would Make Permanent the Availability of Remote Spousal Consent Elections

On December 27, 2022, the IRS issued proposed regulations permitting remote witnessing, in the presence of either a notary public or plan administrator, as an acceptable alternative to the physical presence requirement if certain conditions are satisfied.

Source: Wagnerlawgroup.com, January 2023

SECURE 2.0 Provisions Impacting Employer-Sponsored Retirement Plans

Building upon the retirement improvements made by SECURE 1.0, SECURE 2.0 aims to expand retirement coverage and increase retirement savings. SECURE 2.0 also includes provisions intended to simplify and clarify plan rules and provisions that generate revenue for the U.S. Department of the Treasury. SECURE 2.0 contains more than 90 substantive changes to retirement plan law. The key provisions impacting employer-sponsored retirement plans are discussed here.

Source: Truckerhuss.com, January 2023

Legislative Highlights of SECURE 2.0 Act and Impact on Retirement Plans

The provisions included in the SECURE 2.0 Act will take effect in varying years. This staggered approach gives plan sponsors and service providers more time to understand and implement these changes to their plans and recordkeeping systems. This article provides a high-level summary of selected provisions that are effective in 2023.

Source: Tri-ad.com, January 2023

Continuation of Remote Spousal Consent Proposed by Treasury

The Treasury Department has proposed changes to, and clarifications of, its remote consent rules. The proposed rule, which replaces a temporary notice that expired on December 31, 2022, allows plans to continue to use remote consent, with minor changes. Sponsors of retirement plans may rely on the proposed rule immediately although it will not be effective until six months after a final rule is issued.

Source: Segalco.com, January 2023

Required Minimum Distribution Age to Increase to 75

Effective for distributions made after December 31, 2022, Section 107 of SECURE 2.0 increases the RMD age to 73 for retirees who (a) attain age 72 after December 31, 2022, and (b) attain age 73 before January 1, 2033. It then increases the RMD age to 75 for retirees who attain age 74 after December 31, 2032. Additionally, Congress directed the Internal Revenue Service to update its regulations to eliminate what can amount to a penalty on plan participants with accounts that include annuity contracts.

Source: Benefitslawadvisor.com, January 2023

IRS Proposes Making Remote Notarization Permanent for Retirement Plan Elections & Consents

The proposed amendments would provide an alternative to in-person witnessing of spousal consents required to be witnessed by a notary public or a plan representative, and clarifies that certain special rules for the use of an electronic medium for participant elections also apply to spousal consents. This article provides background and commentary.

Source: Groom.com, January 2023

Pocket Guide to SECURE 2.0

The SECURE 2.0 Act of 2022 was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act, of 2023. This Pocket Guide provides a summary of the retirement-related provisions in SECURE 2.0. Parts I through XIII of the Pocket Guide are organized chronologically by effective date, and the final part summarizes provisions with varying effective dates after SECURE 2.0 enactment.

Source: Erisapracticecenter.com, January 2023

SECURE 2.0 Retirement Reform Becomes Law

The SECURE 2.0 Act of 2022 was enacted as part of the 2023 Consolidated Appropriations Act, which was signed into law on December 29, 2022. It is the culmination of a multi-year, bicameral, bipartisan effort to follow up on the SECURE Act that was enacted on December 20, 2019. SECURE 2.0 contains roughly 90 separate provisions each with its own effective date. This article focuses on the provisions of SECURE 2.0 that are of interest to large and medium-sized employers and plans.

Source: Segalco.com, January 2023

Secure 2.0: Congress Enacts Wide-Ranging Changes to 401k and 403b Plans

As part of its mammoth 2022 year-end spending bill, Congress passed Secure 2.0, which makes dozens of modifications to the laws governing retirement savings. These revisions, almost all of which were driven by concerns that Americans are failing to accumulate sufficient resources to fund their retirement, build on changes Congress made in 2019 in the SECURE Act. This is a list of key provisions in Secure 2.0 that employers with existing 401k and 403b plans need to pay attention to.

Source: Blankrome.com, January 2023

Defined Contribution Retirement Plan: 2023 Compliance Calendar

Retirement plan sponsors are responsible for compliance with many ongoing reporting, disclosure, and notice requirements. This Retirement Plan Compliance Calendar summarizes the major requirements that apply to defined contribution plans for 2023. Due dates are based on a calendar plan year and apply to plans subject to ERISA.

Source: Usicg.com, January 2023

IRS Proposes Alternative to In-Person Witnessing of Spousal Consents

The IRS has issued proposed regulations on the use of electronic media to make participant elections and spousal consents. The proposed regulation generally affects sponsors and administrators of, and individuals entitled to benefits under, certain qualified retirement plans.

Source: Napa-net.org, January 2023

SECURE 2.0 Delivers New Rules for Correcting Retirement Plan Errors

This article discusses three significant changes to corrections of common retirement plan errors: New rules for correcting overpayments, expansion of the Self-Correction Program under the IRS's Employee Plans Compliance Resolution System to cover most inadvertent errors, and making permanent the current EPCRS safe harbor correction method for elective deferral failures related to automatic contribution arrangements.

Source: Erisapracticecenter.com, January 2023

IRS Proposed Regulations Would Permanently Allow Remote Witnessing of Spousal Consent

The IRS issued new proposed regulations that would permanently change the rules that require spousal consent for plan distributions to be signed in the physical presence of a notary or plan representative. Specifically, the proposed regulations would allow plans to accept remote notarization or witnessing by a plan representative if the remote process meets certain standards aimed at ensuring the integrity of the process.

Source: Erisapracticecenter.com, December 2022

How Does One Implement a Student Loan Matching Benefit?

The SECURE 2.0 Act passed Congress and would allow employers to offer matching 401k, 403b, 457b, and SIMPLE IRA contributions if the participant elects to pay down student loans instead of contributing to a retirement plan. This option would be available starting after December 31, 2023. How should plan sponsors go about implementing this provision, if they choose to?

Source: Planadviser.com, December 2022

SECURE 2.0 Retirement Reforms Set to Become Law

The enactment of SECURE 2.0 caps several years of congressional effort. Numerous stakeholders have worked to educate lawmakers about the value of the employer-based retirement system and the need for many policy changes to support it. This article provides a high-level summary of some key provisions in the legislation.

Source: Mercer.com, December 2022

RMD Age Increases to 73 in 2023 Under SECURE 2.0

While it came down to the wire, both the House and Senate have now approved the much-anticipated SECURE 2.0 Act of 2022 as part of the mammoth $1.7 trillion omnibus spending bill.

Source: 401kspecialistmag.com, December 2022

Proposed Changes to the DOL's Voluntary Fiduciary Correction Program

The DOL published proposed updates to its Voluntary Fiduciary Correction Program. The VFCP is designed to encourage employers to voluntarily comply with ERISA by voluntarily correcting certain prohibited transactions and submitting those corrections to the Program for approval. The proposed changes are the first updates to VFCP since 2006 and provide, for the first time, a self-correction feature for delinquent participant contributions and loan repayments, the most common prohibited transactions under ERISA. Here is a summary of the proposed changes.

Source: Truckerhuss.com, December 2022

DOL Proposes Significant Changes to VFCP Program

The VFCP allows plan sponsors to voluntarily correct certain fiduciary breaches to avoid civil enforcement actions and civil penalties imposed under ERISA. The most relevant components of the proposed changes for plan sponsors relate to delinquent contributions of participant deferrals and loan repayments as these tend to occur more frequently than other issues corrected through the VFCP. Importantly, the proposed amended and restated VFCP would add a new self-correction feature, clarify existing transactions currently eligible for correction and simplify certain administrative or procedural requirements for participation in and correction of transactions under the VFCP.

Source: Employeebenefitsblog.com, December 2022

The Unsung Importance of Self-Correction Memos

Self-correction of operational errors arising in qualified retirement plans is a critical means for plan sponsors to retain their plans' tax-qualified status. Self-correction has been promoted by the Internal Revenue Service as part of the Employee Plans Compliance Resolution System for approximately twenty years, but the rules for self-correction have evolved over that period, and some essential requirements of self-correction are still little understood. One recommended component of self-correction that can tend to be overlooked is the preparation of a self-correction memo.

Source: Eforerisa.com, December 2022

DOL Announces Form 5500 Changes

The DOL announced changes to Forms 5500 and 5500-SF (short form) and released updated instructions on December 8. The DOL updates Form 5500 annually to keep it up-to-date with various regulatory changes. Every defined contribution and pension plan sponsor is required to file a 5500 to the IRS and DOL annually.

Source: Plansponsor.com, December 2022

2023 ERISA Plan Compliance Calendar

Being a retirement plan sponsor involves juggling many tasks, one of the more important is to make sure your plan complies with all pertinent federal legislation and regulations. A compliance calendar like this one helps you keep track of your company's required filings, their due dates, and related details so you can avoid incurring any fines or other penalties for late filings or missing information.

Source: Plansponsor.com, December 2022

Your 7-Point Year-End Retirement Checklist

Remember the late nights spent coupon hunting with family after Thanksgiving dinner, scouring the papers, and meticulously planning each store's purchases for Black Friday? Organizational year-end activity is no different, so here are seven financial to-do's that plan sponsors need to complete and remind participants about before December 31.

Source: 401kspecialistmag.com, December 2022

401k Plan Matching Contributions: To True Up or Not True Up?

As a matter of plan design, for purposes of matching contributions, some 401k plans provide that a participant's compensation for the entire plan year is taken into account, while other 401k plans take into account a participant's compensation only for payroll periods for which the participant makes elective deferrals. The former design is commonly referred to as a "true up" feature. This article illustrates, through examples, each design, and addresses why a plan sponsor might choose one design over the other.

Source: Verrill-law.com, December 2022

DOL Releases Final Regulation on ESG Investing

Following the Biden administration's launch of a government-wide effort to combat climate change, on November 22, 2022, the DOL released a final regulation, which allows for more latitude in considering ESG factors when investing plan assets and backtracks on prior Trump-era restrictions in considering ESG factors.

Source: Paulhastings.com, December 2022

For Second Consecutive Year, IRS 2022 Required Amendments List Does Not Affect 401k Plans

On November 21, 2022, the IRS released Notice 2022-62, its annual list of required amendments for individually designed qualified retirement plans, including 401k plans. Notably, for the second consecutive year, the RA List contains no provisions directly applicable to 401k plans and, in fact, contains no changes affecting retirement plans at all.

Source: Compliancedashboard.net, December 2022

2022 Required Amendments List Includes No Changes in Qualification Requirements

While this year's IRS Required Amendments List does not specify changes, that does not necessarily mean that 401k plan sponsors have no amendments to adopt. The RA List does not cover discretionary plan amendments, which generally must be adopted by the end of the plan year in which discretionary plan design or operational changes are implemented, except for certain discretionary amendments that must be adopted before they are implemented.

Source: Thomsonreuters.com, December 2022

DOL Proposes to Amend Its Voluntary Fiduciary Correction Program

The proposed amendment and restatement of the VFC Program and related PTE 2002-51 to incorporate self-correction of the transmittal of delinquent contributions and loan repayments is a mixed bag at best. Although delinquent contributions are the number one failure corrected through the VFC Program, the $1,000-or-less limit on lost earnings may limit the self-correction component's utility.

Source: Thomsonreuters.com, December 2022

DOL Final Regulations Authorize Plan Fiduciaries to Consider Climate Change and Other ESG Factors

The final regulations purport to clarify that fiduciaries may consider the potential financial benefits of ESG funds when selecting investments and that doing so may not violate ERISA. However, it is unclear whether this will be the case in operation.

Source: Thomsonreuters.com, December 2022

2023 US Defined Contribution Plan Compliance Calendar

For calendar-year defined contribution plans, this retirement plan compliance calendar list key IRS, Pension Benefit Guaranty Corp., and Labor Department reporting and disclosure deadlines.

Source: Mercer.com, November 2022

DOL Proposes Adding Self-Correction Component to VFCP

The DOL proposed updates to the voluntary fiduciary correction program, including a provision that should help plan sponsors and providers. More specifically, the addition of a self-correction component for employers that fail to send employee salary withholding contributions or participant loan repayments to retirement plans on time.

Source: Asppa.org, November 2022

ARA Presses DOL for Changes to QPAM Exemption Proposal

The American Retirement Association is calling on the Department of Labor to make changes to its proposed amendments to the Qualified Professional Asset Manager exemption, arguing that, as currently drafted, the proposal would needlessly disrupt plan relationships and increase costs.

Source: Asppa.org, November 2022

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