Benefits Monthly Minute UPDATE: Secure 2.0 Implementation Guidance

The IRS just couldn’t wait for Christmas to gift everyone Miscellaneous Changes Under the Secure 2.0 Act of 2022!  Notice 2024-2 is meant to provide guidance on discreet issues to assist with SECURE 2.0 implementation. The Notice provides guidance in the form of Q&As with respect to the following sections of SECURE 2.0:

  • Section 101 -- expanding automatic enrollment
  • Section 102 -- modification of credit for small employer pension plan startup costs
  • Section 112 -- military spouse retirement plan eligibility credit for small employers
  • Section 113 -- small immediate financial incentives for contributing to a plan
  • Section 117 -- contribution limit for SIMPLE plans
  • Section 326 -- exception to the additional tax on early distributions from qualified plans for individuals with a terminal illness
  • Section 332 -- employers allowed to replace SIMPLE retirement accounts with safe harbor 401(k) plans during a year
  • Section 348 -- cash balance plan accruals and interest crediting rate
  • Section 350 -- safe harbor for correction of employee elective deferral failures
  • Section 501 -- provisions relating to plan amendments (** The Notice generally extends the deadline to amend a qualified plan for SECURE Act, SECURE 2.0, the Miners Act and Sections 2022 or 2023 of the CARES Act to December 31, 2026. The extended deadline does not impact the requirement for plan operations to reflect applicable law prior to plan amendment. **)
  • Section 601 -- SIMPLE and SEP Roth IRA contribution designations, and
  • Section 604 -- optional treatment of employer contributions or nonelective contributions as Roth contributions.

The IRS is inviting comments to Section 113 and Section 348 to be submitted by February 20, 2024. In the meantime, KMK will be providing additional analysis to guide plan sponsors through these important developments. Stay tuned, and happy holidays.

The KMK Law Employee Benefits & Executive Compensation Group is available to assist with these and other issues.

Lisa Wintersheimer Michel

John F. Meisenhelder

Antoinette L. Schindel

Kelly E. MacDonald

Rachel M. Pappenfus

KMK Employee Benefits and Executive Compensation email updates are intended to bring attention to benefits and executive compensation issues and developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.

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