Approximately one year after Congress enacted the SECURE 2.0 Act of 2022 (“SECURE 2.0”), the IRS issued Notice 2024-02, which addresses SECURE 2.0 implementation issues and extends the plan amendment deadline. Although Notice 2024-02 offers helpful guidance for employers and plan administrators, it does not include hotly anticipated guidance on SECURE 2.0 overpayment and
IRS Offers Two-Year Transition Period to Implement SECURE 2.0 Roth Catch-Up Requirement
On Friday, the IRS released Notice 2023-62, which addresses certain pressing implementation issues related to the SECURE 2.0 requirement that catch-up contributions for participants with FICA wages of more than $145,000 during the prior calendar year from the employer maintaining the plan must be made on a Roth basis.
In welcome news for plan sponsors, the guidance announces a two-year “administrative transition period” for implementation of this requirement, which was otherwise set to take effect on January 1, 2024. The notice confirms that, despite a drafting quirk in the SECURE 2.0 statute which suggested that catch-up contributions would be discontinued after 2023, catch-up contributions will continue to be available. The notice also outlines future guidance that Treasury and the IRS intend to issue on other Roth catch-up requirement topics.
PBGC Provides One-Time 4010 Filing Waiver for Certain Employers
ERISA Section 4010 requires a contributing sponsor of certain single-employer pension plans, as well as the sponsor’s controlled group members, to provide controlled group, financial, and actuarial information to the PBGC each year. The requirement generally applies when one or more plans within a controlled group has a funding target attainment percentage for 4010 purposes
SECURE 2.0 Brings Significant Changes for 403(b) Plans
As part of our continuing series on SECURE 2.0, signed into law December 29, 2022, this post focuses on significant changes for section 403(b) tax-sheltered annuity plans (“403(b) plans”). 403(b) plans are similar to 401(a) tax-qualified defined contribution plans but sponsored by public schools or non-profit entities and subject to unique requirements under the
SECURE 2.0 Delivers New Rules for Correcting Retirement Plan Errors
As part of our ongoing series on SECURE 2.0, this post discusses three significant changes to corrections of common retirement plan errors: (1) New rules for correcting overpayments, (2) expansion of the Self-Correction Program under the IRS’s Employee Plans Compliance Resolution System (“EPCRS”) to cover most inadvertent errors, and (3) making permanent the current
Fifth Circuit Rules that DOL Advisory Opinion Is Subject to Judicial Review and Invalidates DOL Advisory Opinion on Health Insurance
On August 17, 2022, the U.S. Court of Appeals for the Fifth Circuit held that a Department of Labor (“DOL”) advisory opinion, which found that an insurance plan was not governed by ERISA, was unenforceable under the Administrative Procedure Act (“APA”). In doing so, the court ruled that the DOL advisory opinion constituted a “final