"Currently, about half of plan sponsors have adopted at least one of the distribution provisions while 37 percent have adopted the natural disaster provision and 30 percent have adopted the domestic violence provision. We also asked why they are or are not adding these provisions and the answers range from 401(k) administration is complicated enough as it is, concerns about abuse, to participants requesting them. One employer added four but limited use to three per year, which is an interesting way to balance the flexibility in offering options with limiting abuse and leakage." MORE >>
"SECURE Act 2.0 modified [the] rule for an employer that replaces its SIMPLE IRA plan mid-year with a safe harbor 401(k). In that specific scenario, the SIMPLE IRA owner can roll over the account to the newly established safe harbor 401(k) without triggering the early distribution penalty, regardless of the two-year waiting period. Distribution restrictions in the new plan apply to the rollover, however." MORE >>
"Participants often work for multiple participating employers during a year. As a result, no single employer may have complete visibility into an individual's prior-year wages. In addition, coordination across multiple payroll and recordkeeping systems can make compliance significantly more complicated.... Although the relief provides additional time, implementation will require careful coordination among boards of trustees, plan professionals, participating employers, payroll providers, and recordkeepers." MORE >>
"[P]lan sponsors may wish to use the additional time provided by the delay to coordinate with recordkeepers on system readiness to implement any required or desired changes to address the Delayed RMD Regulatory Provisions. Plan sponsors should also document interim administrative positions to support reliance on the good-faith compliance standard[.]" MORE >>
"The DOL's announcement in January that it would reduce its focus on enforcing rules governing how plans meet their fiduciary duties to missing participants ... may have given some plan sponsors a sigh of relief.... Contributing to the [Retirement Savings Lost and Found database] is a win for plan sponsors ... as it is another 'tool in their toolbox' to show the DOL they are trying to connect with participants in fulfillment of their fiduciary duties." MORE >>
"If we want retirement savings to follow the worker, they shouldn't need a GPS, three passwords, and a tax advisor to get there.... Auto portability would work if it were solely within the employer plan ecosystem -- but as it's currently structured, the money must flow through an IRA. For pre-tax money? Not perfect, but manageable. For Roth money? Full stop.... A participant with both types of funds will see some money move. Other money gets stuck. Confusion increases." MORE >>
"[T]he only participants who default to electronic disclosure of all participant statements are those who are wired-at-work and have received the required 2002 Safe Harbor Notice or those who have affirmatively elected ... to receive electronic statements.... [It] may be reasonable to just give paper statements to everyone (and, if you want, you can also provide duplicate electronic delivery to all). If you choose this option, however, remember to consider that one of the advantages to electronic delivery is the security it provides." MORE >>
"By December 31, 2026, plan sponsors of certain qualified retirement plans, including 401(k) and defined benefit plans, must amend the plans to incorporate required and discretionary changes under the [CARES] Act, the Setting Every Community Up for Retirement Enhancement (SECURE) Act, and the SECURE 2.0 Act of 2022." MORE >>
"Employers may now allow employees to elect to have fully vested matching and nonelective contributions made to a designated Roth account under a qualified plan, or a Roth SEP IRA or Roth Simple IRA. For tax treatment and income tax purposes, the IRS treats these designated Roth employer contributions as if they were in-plan Roth rollovers ... Because of this reporting treatment, Form 1099-R must be issued for these contributions." MORE >>
"The proposed change to the 2002 safe harbor regulation would add a paragraph that states a benefit statement described in ERISA section 105(a)(2)(E) may be furnished electronically only if the plan first provides a one-time initial notice on paper.... The 2020 safe harbor regulations would also be updated ... [to] clarify that any paper benefit statement required by section 105(a)(2)(E) is to be furnished without charge. " MORE >>
"[SECURE 2.0] narrowed the ability of plan sponsors to electronically furnish these participant benefit statements. Now, the DOL is proposing new regulations that implement this restriction and increase plan sponsors' obligation to furnish paper documents.... By ensuring that at least some plan documents are provided on paper, the DOL hopes that more participants will read and understand important plan information." MORE >>
"Given the good faith compliance standard -- and the fact that the statutory requirement is already in effect -- plan administrators should review the proposal and consider implementing it sooner rather than later, although the requirements may change once finalized." MORE >>
"CPAs are in a great position during the tax filing season to remind individuals of these Roth catch-up requirements, and to remind them to ask their employers if any action is required on their behalf for making any catch-up contributions in the future. Depending on the facts and circumstances, individuals under the age of 50 who expect to have wages above the threshold in the near future may be more inclined to contribute on a pre-tax basis, knowing that the Roth option could be required on a portion of their retirement savings." MORE >>
"The next wave of requirements includes Roth catch-up contributions of high-earners, higher IRA contribution limits, and mandatory automatic enrollment and escalation for new plans. While each provision is designed to strengthen retirement outcomes, together they significantly broaden the scope of plan sponsor responsibilities. More participants, more accounts and more complexity inevitably translate into fiduciary exposure." MORE >>
69 pages. "The [DOL] is proposing narrow amendments to two separate electronic disclosure safe harbors for purposes of implementing section 338 of the SECURE 2.0 Act of 2022. Taken together, the two existing safe harbors permit the broad use of electronic disclosure under prescribed conditions for the furnishing of required disclosures under Title I of [ERISA]. Section 338 of SECURE 2.0 amended section 105(a)(2) of ERISA to require retirement plans to provide paper benefit statements in certain cases. Section 338 also instructed the Department to update its electronic disclosure safe harbors in connection with the statutory changes. The proposed amendments would implement these Congressional mandates." MORE >>
"This announcement provides that the [Treasury Department and the IRS] anticipate that certain portions of final regulations relating to required minimum distributions (RMDs) under section 401(a)(9) of the Internal Revenue Code will apply for the distribution calendar year that begins no earlier than 6 months after the date that final regulations are issued in the Federal Register." MORE >>
"The decision to adopt the $7,000 automatic cash-out limit involves balancing administrative efficiency against participant impact and implementation costs." MORE >>
"Once an excess deferral exists, the Internal Revenue Code requires that the excess amount, along with all earnings attributable to that excess through December 31, be distributed to the participant no later than April 15 of the following year, which aligns with the participant’s individual tax return deadline. Meeting this April 15 deadline is critical because it determines how the excess will be taxed." MORE >>
"The deadline was December 31, 2026, but [Notice 2026-9] has extended it to December 31, 2027.... This new extension does not apply to qualified plans, 403(b) plans, or 457(b) plans of state and local governments. The deadline for their amendments remain December 31, 2026, with certain exceptions for collectively bargained and governmental plans." MORE >>
48 pages. "What's New: [1] Automatic enrollment.... [2] Compensation limits for 2025 and 2026.... [3] Elective deferral limits for 2025 and 2026.... [4] Defined contribution limits for 2025 and 2026.... [5] Defined benefit limits for 2025 and 2026.... [6] SIMPLE plan salary reduction contribution limits for 2025 and 2026.... [7] Catch-up contribution limits for 2025 and 2026.... [8] Higher catch-up contribution limit for ages 60 to 63.... [9] Distributions from Roth accounts." MORE >>
"If catch-up contributions are recharacterized under IRC 415(c) and the participant is subject to the Roth requirement, any pre-tax deferrals must be converted to Roth. That means potential tax consequences for the participant.... The Roth catch up requirement can also create potential nondiscrimination challenges." MORE >>
"Pooled employer plans (PEPs) are the latest expansion in defined contribution plan outsourcing in the U.S., and pooled plan arrangements are well established across the globe ... Since the SECURE 2.0 Act passed in 2022, over 50,000 401(k) plan sponsors have adopted a PEP model. PEPs will soon become available to tax-exempt employers eligible to sponsor 403(b) plans." MORE >>
"[S]ponsors of qualified and Section 403(b) plans have until December 31, 2027, to amend their plans for the RMD changes included in the 2025 RAL. The SECURE 2.0 RMD changes that were not included in the 2024 final regulations are expected to be included in a later RAL ... The 2025 RAL also states that the final regulations issued in 2025 regarding SECURE 2.0's Roth catch-up requirement for high earners are expected to be included in the 2027 RAL. If that proves to be the case, plan sponsors will have until December 31, 2029, to amend their plans to include the Roth catch-up provisions." MORE >>
"Plan sponsors rely on providers because they cannot realistically master this level of detail themselves.... Providers who want to avoid being swept into the catch-up mess should focus less on marketing readiness and more on structural honesty. First, stop oversimplifying.... Second, document limitations clearly.... Third, help sponsors build internal processes.... Finally, resist the urge to promise protection." MORE >>
