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Know This Notice: Changes to the Special Tax Notice

"The revised special tax notice incorporates wording recommendations in the GAO report. The GAO report took issue with the old version not clarifying to participants that one of their options was to do nothing at all. In other words, participants may leave their balance in the retirement plan. In addition, the GAO report thought it would be clearer and more concise to list the four distribution options in the beginning with a brief description of the corresponding tax consequences. Both of these changes are included in the new IRS templates."

Navigating SECURE 2.0 Changes in 2026

"From Roth catch-up contributions to new paper statement requirements and distributions for long-term care premiums, the coming year promises to test your adaptability and attention to your clients' needs. [Here] are some factors to consider or questions to evaluate to ensure compliance and deliver value."

SEPs Vs 401(k) Plans: 3 Factors for 3 Client Profiles

"Although SEPs can be beneficial, there are certain types of small businesses that may want to evaluate a 401(k) plan in comparison to a SEP. Some small business owners may find that a 401(k) plan is better suited to meet their objectives when considering three factors: [1] contribution allocation; [2] maximum contribution deduction; and [3] eligibility and vesting conditions."

Evaluating Auto Rollover IRA Providers

"To avoid being a landfill where small balances languish, automatic rollover IRAs -- whether 'traditional' or related to auto-portability -- should be evaluated using ... three criteria. These criteria ensure that individuals aren't charged excessive fees, earn a reasonable rate of return and have access to their money and information to make better financial decisions."

The Truth About Auto-Portability: There Are Better Alternatives

"Improving individuals' plan experiences and securing their future financial outcomes is (and should be) one of our industry's top priorities. Currently, their plan experience is negatively impacted by the distribution and rollover process. Their future financial outcome is jeopardized by poor decisions without expert help. Auto-portability has limited application in fixing these critical issues. A better solution is to improve the distribution and rollover process through standardization and automation."

The Truth About Auto-Portability

"Articles or marketing pieces supporting auto-portability appear to rely on two faulty strategies. Remove those misconceptions and you realize that auto-portability is not significantly better than existing automatic rollover IRA programs.... For the 55% who cash out completely, auto-portability does not help because the balances have not moved from the 'transfer out' plan to an automatic rollover IRA first."

Understanding the Auto-Portability Structure and Its Value Proposition

"[A]uto-portability is limited to small balances -- $7,000 or less.... This can make it very confusing for individuals who -- over time -- leave multiple employers with balances on each side of the $7,000 threshold.... Auto-portability deducts a fee from each individual's automatic rollover IRA balance -- without their consent -- before sending the money to the 'transfer-in' plan.... The auto-portability process adds three more notices to the list of required retirement plan notices.... The 'transfer-in' plan must designate a plan representative to have fiduciary responsibility for monitoring transfers into the plan through auto-portability."

Time Is Running Out to Take Advantage of IRS Forfeiture Relief

"The IRS considers it to be an operational failure if forfeitures remain unused beyond the 12-month deadline.... [T]he proposed regs provide transitional relief for old forfeiture balances. For any forfeitures incurred during any plan year that begins before January 1, 2024, the IRS will treat those forfeitures as having been incurred in the first plan year that begins on or after January 1, 2024."

How to Avoid the Need to Submit Any Information to the DOL Lost and Found Database

"the DOL asks for information for participants who (i) have separated from service, (ii) are owed a plan benefit, and (iii) are age 65 or older. Those three criteria are identical to the ability to process a force-out distribution without participant consent. No information needs to be submitted to the Lost and Found Database if you require any participant satisfying these three criteria to take a distribution (including by force-out distribution)."

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

"[FAB 2025-01] allows temporary relief of DOL enforcement for fiduciaries who transfer retirement plan benefits of $1,000 or less owed to missing participants to a state unclaimed property fund. This relief is only provided if the plan fiduciaries comply with applicable conditions. But satisfying the applicable conditions can be overly-complex ... To verify if the fund qualifies as an 'eligible state fund,' ... nine conditions must be met by the state unclaimed property fund[.]"

SECURE 2.0 in 2025: Big Plan Design Changes

"Knowing how the following three provisions influence plan design, administration, and costs can help you better serve your clients. [1] The mandatory automatic enrollment feature will shake up how plans are designed in the future. [2] The long-term, part-time employee change in 2024 gets a reduction in 2025. [3] Participants in their early 60s get a chance to save more for the future."

Taking Advantage of Forfeiture Relief While Avoiding Lawsuits

"Lawsuits filed in 2024 allege that plan fiduciaries are improperly using forfeitures.... [T]here is no clear direction yet on how these lawsuits will affect plan administration. However, you can assist clients now by discussing the following strategies for preventing or avoiding a forfeiture lawsuit. [1] Paying plan expenses with forfeitures ... [2] Specifying the use in the plan document ... [3] Don't forfeit forfeiture relief."

SECURE 2.0 in 2025: Big Plan Design Changes

"We don't yet have a clear definition of who is a 'covered employee' subject to the mandatory auto enroll feature.... The addition of an auto enroll feature will likely result in more small account balances for terminated participants.... Similar to the mandatory auto enroll feature, the LTPT employee provisions may result in increased small balances for terminated participants.... Beginning in 2025, an increased dollar limit [for catch-up contributions] applies for participants who have attained age 60 but not yet age 64.... [T]he provisions effective in 2025 can be operational prior to amending the plan."

Avoiding the 401(k) Rollover 'Mistake'

"An integrated, best-in-class rollover solution can not only avert those numerous hazards, it can also provide a ready means for participants to preserve their retirement savings and an efficient way for advisors to continue expanding and enhancing their relationship with that participant, including access to managed account options."

Avoid RMD Complexity with Force-Out Distributions at Normal Retirement Age

"To ensure participants are using their retirement benefits -- or at least being taxed on them -- the RMD process has been around since the passage of ERISA. A simple concept has increasingly become an operational nightmare.... Everyone knows about force-out provisions for terminated participants with a balance of less than $7,000. That same process can also apply to terminated participants who reach normal retirement age.... [P]articipant consent is only required for any distribution before the participant attains the plan's normal retirement age (or age 62, if later)."

Take It or Leave It

"A well-executed rollover can tip the balance toward financial security.... Today the 'easy' path for participants is to simply take the money -- net of taxes and penalties -- and run. But that puts millions of participants and their retirements at risk. The challenge for the industry today is to develop secure, prudent pathways that make it easy for participants to do what's best for their long-term retirement security -- and the nation's."

Auto Rollover IRAs for Force-Outs: Controlling Fiduciary Risk and Unwanted Taxable Income

"All uncashed checks are a fiduciary risk because they remain plan assets, and there is an ongoing responsibility to search for the missing participants. In addition, using checks for force-out distributions of $1,000 or less can result in unwanted taxable income and potential penalties for participants.... Address both the fiduciary risk and unwanted taxable income by using the automatic rollover IRA for all force-out distributions -- from $1 to $7,000."

The Unclaimed Retirement Benefits Problem, and What to Do About It

"[R]ecent headlines [put] the total amount of lost or forgotten [retirement plan] assets well north of a trillion dollars. The sheer size of the number has the retirement plan industry's attention, as well as concern from politicians and policymakers. There's an increasing consensus that something should (MUST) be done."

SECURE 2.0 Force Out Limit and Plan Audits

"Effective for force out distributions to Automatic Rollover IRAs made after December 31, 2023, the new limit will be $7,000. This change will be helpful to all plan sponsors, but especially those at or just over the 100-person participant count for purposes of plan audit requirements.... A few things to note about the new $7,000 cap and what to do if your plan wants to take advantage of it."

SECURE 2.0 Provides New Tools to Assist Plan Participants in Crisis

"In addition to making the hardship distribution rules more flexible, SECURE 2.0 expands on the ability of defined contribution plan sponsors to make penalty-free distributions to participants who have personal emergencies. In some cases, the permanent SECURE 2.0 provisions are modeled on temporary relief granted for specific federal disasters or under the CARES Act."