Retirement
Subscribe to Retirement's Posts

SECURE 2.0 Technical Corrections Are on the Way, Eventually

In an open letter to Secretary of the Treasury Janet Yellen and IRS Commissioner Daniel Werfel, congressional leaders identified several technical errors in the SECURE 2.0 Act that they intend to correct. Although the letter indicates that Congress intends to correct these technical errors and ambiguities in the legislation, it does not address the timetable for doing so.

Read more here.




read more

Just Catching Up? Oops! Congress Clarifies Catch-Up Contributions Are Here to Stay

Section 603 of the SECURE 2.0 Act requires catch-up contributions made by certain high-wage earners to be made on a Roth basis beginning in 2024. But it also contains one of the most talked about technical errors in the legislation, one that resulted in Congress eliminating all catch-up contributions—for everyone. Not surprisingly, that isn’t quite what Congress had in mind.

Read more here.




read more

Just Catching Up? Payroll Challenges Plague Roth Catch-Up Contribution Implementation

The SECURE 2.0 Act requires participants who earned more than $145,000 in FICA wages in the prior year from their current employer to make all catch-up contributions on a Roth basis beginning in 2024. For many employers, the primary concern is how to integrate the new rule with how payroll deductions for catch-up contributions are processed and then transmitted to plan recordkeepers.

Read more here.




read more

Just Catching Up? Wages, by Any Other Name, Not So Sweet for Employers Under SECURE 2.0

Retirement plans often apply (and in some cases are required to use) multiple definitions of wages or compensation for various plan purposes. Given this complexity, failures to follow a plan’s definition of compensation are one of the most common issues experienced by retirement plan sponsors. Unfortunately, as drafted, the SECURE 2.0 Act only adds to that complexity.

Read more here.




read more

Just Catching Up? All for One, or None for All, Catch-Up Contributions Under SECURE 2.0

Beginning after December 31, 2023, the SECURE 2.0 Act indicates that any plan that permits catch-up contributions must require certain employees to make their catch-up contributions on a Roth basis. Employers have expressed significant concerns regarding their ability to implement the necessary system changes—specifically to payroll and recordkeeping systems—by year-end.

In response, employers have begun to explore alternatives that might simplify implementation (or avoid the need to do it altogether). This has produced several questions about what employers can and cannot do.

Read more here.




read more

Just Catching Up? SECURE 2.0 Roth Catch-Up Contribution Requirement Leaves More Questions than Answers

Beginning after December 31, 2023, the SECURE 2.0 Act indicates that any plan that permits catch-up contributions must require certain employees—i.e., those whose wages from their employer exceed $145,000 in the prior calendar year—to make their catch-up contributions on a Roth basis. This change raises a host of questions about how the rule is intended to apply in practice and even more concerns about the operational obstacles employers will face in attempting to implement the change by year-end.

In this series of articles, we will explore the implications of SECURE 2.0’s changes to catch-up contributions and how employers should respond.

Read first article here.




read more

Proposed Legislation Would Allow 403(b) Plans to Invest in Lower-Cost Collective Investment Trusts

A new bill introduced in Congress would allow 403(b) plans maintained by tax-exempt organizations to make use of collective investment trust (CIT) investments. CITs are an alternative to mutual funds that may provide significant cost savings for 403(b) plans and their participants. The SECURE 2.0 Act took the first steps along this path by making amendments to the Internal Revenue Code to permit 403(b) plans to invest in these vehicles; however, that legislation failed to include the necessary changes to securities laws. The Retirement Fairness for Charities and Educational Institutions Act of 2023 aims to take the next steps by amending the Securities Act and the Investment Company Act to allow 403(b) plans to make use of CITs.

Read more here.




read more

A Living Wage: The Latest ESG Challenge for Corporate Governance

Long considered controversial from economic and shareholder perspectives, living wage concepts are receiving more attention in the context of economic policy, social responsibility and ESG investing. As progressive perspectives concerning income equality, and executive and employee compensation, are becoming more mainstream, corporate leaders should prepare for greater engagement in this important conversation.

Access the article




read more

Mechanics of DB Plan QDROs Differ from Those for DC Plans

There are requirements for a qualified domestic relations order (QDRO) that apply whether the QDRO is for splitting up defined contribution (DC) plan assets or defined benefit (DB) plan assets, notes McDermott’s Lisa K. Loesel.

However, the mechanics of setting up QDROs vary between DC and DB plans. Read on to discover the different paths for getting the right benefits to the right people when a plan participant divorces.

Access the full article.

Originally published on PLANSPONSOR, January 2020




read more

Finally SECURE: Opportunities in the 2019 SECURE Act for Plan Sponsors

The SECURE Act—the most significant piece of retirement plan legislation in more than a decade—is now law. Plan sponsors should immediately start considering how changes included in the SECURE Act could impact their retirement and health and welfare plans in 2020 and beyond.

Access the full article.




read more

STAY CONNECTED

TOPICS

ARCHIVES

Top ranked chambers 2022
US leading firm 2022