Congress Passes The Secure 2.0 Act
Published on by Eric Goodman in Benefit Plan Audits
With the end of the year deadline looming, Congress passed a package that promises to add billions of dollars to participant plan accounts over the next decade. One major point in this package is the addition of features to company 401(k) plans.
In the coming days, President Joe Biden intends to sign the measure into law. It is anticipated that this package will take effect in 2023.
Significant features of 2.0:
- Increases the minimum age that participants are required to start drawing down on their retirement funds.
- Existing defined contribution plans automatically enrolling new workers starting at a minimum 3% contribution rate and increasing to at least 10% but no more than 15%.
- Businesses can make retirement account contributions that match student loan payments.
- Part-time employees can enroll in retirement plans, even if limited hours would have prevented participation in the past.
- Small employers can take advantage of workplace saving tax credits.
- Directs IRS to create a pathway for employers to adopt annuity options for workers that ensure guaranteed lifetime income.
With 2023 around the corner now is the time to get ahead on what changes to plan accounts are ahead.
Click here to read the Senate Finance Committee’s summary of Secure 2.0.
If you have questions or need assistance interpreting The Secure 2.0 Act, Barnes Dennig can help. For additional information please contact us. As always, we are here to help and look forward to speaking with you soon!