As your retirement partner, keeping you informed and up-to-date on current and proposed regulation is of the utmost importance to us.
Today, we’re breaking down two proposed items that may have an impact on you as a Plan Sponsor; RISE Act of 2021, and SECURE Act 2.0.
Retirement Improvement and Savings Enhancement (RISE) Act of 2021
Proposed Regulation:
Establishing an online lost and found database at the DOL to help locate retirement savings from former employers
Expansion of SECURE Act’s open MEP for public education and non-profit employers to join a 403(b)
Increasing the limit to $7,000 to transfer former employees’ balances to an IRA
Permitting employers to offer small incentives to boost participation in workplace plans
Simplify and clarify reporting and disclosure requirements
May be combined with SECURE Act 2.0 for consideration
Setting Every Community Up for Retirement Enhancement (SECURE) Act – Current and 2.0
Secure Act 2.0 proposed regulation may:
Increase small employer pension plan start up credit to cover costs of implementing a 401(k) (first 3 years)
Create a credit to encourage small employers to make contributions to their 401(k) plan for their employees
Require 401(k), 403(b), and SIMPLE plans to automatically enroll participants upon eligibility
Reduce the requirement for part-time workers to become eligible to make deferrals to 2 years from hire date
Current SECURE Act regulation:
RMD Age Increase: Adjusted to 72 for those turning 70.5 in 2020 or later
Penalty-Free Withdrawal Option: Up to $5,000 for a new baby or adoption
Greater Access to Retirement Benefits:
MEP/PEP: Starting in 2021, the “one-bad-apple” rule is eliminated
Part-time employees would become eligible if:
They have completed 1 year of service (with the 1,000-hour rule), or
3 consecutive years of service with > 500 hours
Safe Harbor Design:
Elimination of the annual notice for plans relying on a nonelective contribution
Additional flexibility for employers that adopt a nonelective Safe Harbor design mid-year
Your retirement services team is here to help. Please contact us with any questions about these regulations and their potential impact on your company’s retirement plan.
For more information on Securing a Strong Retirement Act of 2022, click here.
