The SECURE Act

The SECURE Act requires that long-term/part-time employees must be permitted to make elective deferrals under an employer’s 401(k) plan after three years working more than 500 hours.

Lifetime Income Disclosures present account balances as an annuity to better inform participants on monthly income after retirement.

The SECURE Act was passed on December 20, 2019. RMS has compiled a summary of the different provisions in the Act.

Section 401 of the Act limited the timing of distributions from an inherited IRA.

Section 302 of the SECURE Act expanded the benefits of 529 college savings plans.

Section 202 of the Act revised Form 5500 rules to allow related employers to file a consolidated Form 5500.

Section 102 of the Act amends the tax laws to increase the auto enrollment cap to 15%.

A plan will be considered adopted for a particular year as long as it is adopted before the due date of the business tax return (including extensions).

Sections 106 of the Act amend the tax laws to Treat Certain Taxable Non-Tuition Fellowship and Stipend Payments as Compensation for IRA Purposes.

Employers who start a new plan or add auto enrollment to an existing or new plan are eligible for tax credits to help offset the expense of the plan.