The IRS has granted additional, albeit temporary, COVID-19-related relief for sponsors of “safe-harbor” 401(k) and 403(b) plans (i.e., plans that are exempt from one or both of the ADP and ACP nondiscrimination tests). Notice 2020-52, which was issued on June 29, 2020, provides temporary relief from the current requirements for mid-year amendments to such plans, and provides additional clarification regarding mid-year amendments to safe-harbor plans that only affect highly compensated employees. This guidance is welcome relief for plan sponsors who feel the financial need to reduce or suspend employer contributions under these plans, but who may not be able to satisfy the current regulatory requirements for mid-year amendments.
The Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE” Act) has broad implications for retirement plans. Although the Act’s primary focus is on defined contribution plans, several provisions of the Act and its sister legislation apply only to defined benefit plans.
This is the fourth in a series of articles describing key provisions of the legislation. Our focus in this article is on the provisions applicable to defined benefit plans – in-service withdrawals, required minimum distributions, and nondiscrimination testing relief.
On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act, 2020, which includes the Setting Every Community Up for Retirement Enhancement Act (the “SECURE” Act). The SECURE Act represents the most significant retirement legislation in more than a decade (i.e., since the Pension Protection Act of 2006).
This is the third in a series of articles describing key provisions of the SECURE Act. Our focus in this article is on the provisions that are unique to Section 403(b) tax-sheltered annuity plans, governmental Section 457(b) plans, and Individual Retirement Accounts/Annuities (IRAs). Many of the SECURE Act provisions that are broadly applicable to retirement plans (such as the increase in the age at which required minimum distributions must begin, and the new rules curtailing the ability to “stretch” post-death minimum distributions under defined contribution plans over the life expectancy of the participant’s designated beneficiary) also apply to 403(b) plans, 457(b) plans, and IRAs. Because we addressed those provisions in the second article in this series, we will not do so again here.
On December 20, 2019, President Trump signed into law the Further Consolidated Appropriations Act, 2020, which includes the Setting Every Community Up for Retirement Enhancement Act (the “SECURE” Act). The SECURE Act amounts to the most significant retirement legislation in more than a decade. Our focus in this article is on the legislation’s effect on retirement plans generally, including provisions broadly applicable to defined contribution, defined benefit, 401(k), 403(b), and certain 457(b) plans.
In the waning days of 2019, President Trump signed into law the most significant retirement legislation in more than a decade. The Setting Every Community Up for Retirement Enhancement – or “SECURE” – Act includes far-reaching changes that affect qualified retirement plans, 403(b) and 457(b) plans, IRAs, and other employee benefits. In a series of articles, we will describe key provisions of the Act. Our first article provides an overview of the Act’s key provisions and their effective dates. Some of the changes under the SECURE Act are effective immediately, while others are effective for plan or tax years beginning on or after January 1, 2020. Although the Act generally provides sufficient time to amend plan documents, employers must modify certain aspects of plan administration (and potentially financial planning decisions) now to align with the SECURE Act’s more immediate requirements.