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Retirement Plans Newsletter

January 18, 2024


[Official Guidance]

Text of DOL Proposed Regs: Automatic Portability Transaction (PDF)

160 pages. "This document contains a proposed rule that would implement the statutory prohibited transaction exemption under section 4975 of the Internal Revenue Code for certain automatic portability transactions. Section 120 of the SECURE 2.0 Act of 2022 amended Code section 4975 to add a statutory exemption for the receipt of fees and compensation by an automatic portability provider for services provided in connection with an automatic portability transaction....

"The Department is proposing that any final rule adopted based on this proposal would be effective 60 days after publication in the Federal Register and that the requirements of the final rule would have prospective applicability. The Department specifically solicits comments on whether there should be some delayed applicability date to allow for automatic portability providers and plan fiduciaries to make any changes to automatic portability programs or related contracts or arrangements that may be needed or desired in light of the final rule. This approach is intended to make it clear the statutory exemption is available in accordance with the effective date of the SECURE 2.0 Act while acknowledging that there may be a need to transition contracts or arrangements to meet specific requirements of the final rule."  MORE >>

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

[Guidance Overview]

DOL Releases Proposed Regs on Retirement Plans and Automatic Portability Transactions When Employees Change Jobs

"The department's proposed rule would implement Section 120 of the SECURE 2.0 Act, which allows an automatic portability provider to receive a fee in connection with executing an automatic portability transaction for certain distributions into Safe Harbor IRAs, through an added exemption to Internal Revenue Code section 4975. The proposal covers the eleven specific topics identified in the statutory exemption for regulations or other guidance to carry out the purposes of the auto-portability amendments."  MORE >>

Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]

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BenefitsLink® Retirement Plans Newsletter, ISSN no. 1536-9587.

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