2024 Compliance Calendar for DC Retirement Plans
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In This Issue
Compliance and Regulatory Defined Contribution Retirement Plan: 2024 Compliance Calendar Retirement plan sponsors are responsible for compliance with any ongoing reporting, disclosure, and notice requirements. This Retirement Plan Compliance Calendar summarizes the major requirements that apply to defined contribution plans for 2023. Due dates are based on a calendar plan year and apply to plans subject to ERISA. Source: Usicg.com De Minimis Financial Incentives to Participate in a 401k or 403b Plan On December 20, 2023, the IRS issued Notice 2024-2, which provides question-and-answer guidance on various aspects of the SECURE 2.0 Act. This article focuses on "de minimis financial incentives" under SECURE 2.0 Act Section 113. Source: Spotlightonbenefits.com New Guidance Fills in the Blanks for Roth Employer Contributions As a result of these new rules, allowing employees to elect to treat matching or nonelective contributions as Roth contributions has become more attractive, especially for plans that already permit Roth deferrals and in-plan Roth conversions. The elimination of lifetime RMD requirements means that participants will no longer have to roll their distributions into Roth IRAs to avoid the lifetime RMD rules, which has been a common practice. Source: Cohenbuckmann.com In the Nick of Time: IRS Issues Proposed Regulations for the Long-Term, Part-Time Employee Rules On November 27, the IRS issued a Notice of Proposed Rulemaking addressing the "long-term, part-time employees" rules enacted under the Setting Every Community Up for Retirement Enhancement Act of 2019 and the SECURE 2.0 Act of 2022. The proposed regulations provide helpful clarity for plan sponsors required to implement these new rules beginning January 1, 2024. Source: Icemiller.com Using Force Out Distributions to Avoid a 401k Audit If you seek avenues to avoid a costly 401k audit, your focus should be headcount. Why headcount? Because it is what the government uses as a measuring stick to determine which plans must be audited. Between recent Acts of Congress and rule changes implemented by the IRS, there are currently two unrelated changes to be aware of. Both can potentially reduce the number of plans subject to audit significantly. Source: 5500audit.com SECURE 2.0 Provisions With 2024 Implementation Dates This article summarizes provisions of SECURE 2.0 that retirement plans may need or want to implement for 2024. While no amendments are required for plans heading into 2024, plan operations may see some updates, especially if the plan sponsor wishes to implement some of the new optional features. Source: Verrill-law.com 12 Key Elements in the IRS SECURE 2.0 "Grab Bag" Notice On December 20, the IRS released the long-awaited SECURE 2.0 guidance (a/k/a the "Grab Bag") in the form of Notice 2024-02. The notice is 81 pages of Frequently Asked Questions on various SECURE 2.0 provisions. As expected, there was no guidance related to student loan matching, pension-linked emergency savings accounts, or long-term part-time employees. There was also a lot of other relevant guidance. This is a summary of the key points of each area of guidance in Notice 2024-02. Source: Napa-net.org »» Click here for more Compliance and Regulatory Material Fiduciary and Plan Governance What Factors Impact Retirement Income the Most, and Which Factors Impact it the Least It is important to note that the DOL admonishes fiduciaries to "not consider fees in a vacuum." Why is that? Because the DOL understands what truly impacts retirement income. A simple calculation shows that deferral rates, employer match rates, and plan performance have the greatest impact on retirement income and that changes in retirement plan fees have the least, even if they are decreased by 20%. Source: Fiduciarydecisions.com Hiring an Independent Fiduciary for a 401k Plan Company Stock Fund This document summarizes some common questions that plan sponsors and plan committees ask when considering whether to appoint a discretionary independent fiduciary and investment manager for a 401k plan company stock fund. Source: Newportgroup.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, Analysis, and Papers Why SECURE 2.0 Act Auto Enrollment and Escalation Will Boost Financial Wellbeing The SECURE Act 2.0 contains dozens of changes to retirement plans, but perhaps none bigger than these two: New 401k and 403b plans will be required to automatically enroll participants in the respective plans, and employee salary deferral rates will automatically escalate each year. Here's what you need to know. Source: Hubinternational.com The 401k vs. Student Loans Decision According to the author, behaviorally speaking, you're often better off paying down debt rather than investing. Mathematically speaking, there are times when investing makes more sense than paying down low-interest-rate debt, even though paying off the debt provides a guaranteed return. Deciding between maximizing a 401k retirement account and paying off moderate-interest debt, however, can be a conundrum. The article discusses this issue. Source: Whitecoatinvestor.com Auto Portability to Help Boost Wealth by $1.6 Trillion Over 40 Years New results from the Retirement Clearinghouse's Auto Portability Simulation model further reveal the potential for auto portability to dramatically increase retirement savings. Based on new assumptions that increase the model's predictive accuracy, the firm's resulting paper reveals four key findings, including that the net incremental wealth generated by auto portability could be $1.6 trillion over 40 years. Source: Napa-net.org »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers and Other Service Providers The Proposed DOL Fiduciary Rule: Significant Changes for Advisers The DOL's recently issued proposed rule would expand the definition of fiduciary advice to cover many services provided by advisers to retirement plans and IRAs. Under this expanded definition, advisers may need the relief provided by Prohibited Transaction Exemption 2020-02 to avoid a prohibited transaction. The DOL has also proposed amendments to PTE 2020-02. This article describes the proposed fiduciary advice rule and the proposed amendments to PTE 2020-02 and discusses the impact these proposals, if finalized, will have on advisers. Source: Fredreish.com DOL Posts "Unofficial Transcripts" of Fiduciary Rule Hearing The DOL announced that the Employee Benefits Security Administration published the unofficial transcripts of its online hearing on the Notice of Proposed Rulemaking, "Retirement Security Rule: Definition of an Invest. Advice Fiduciary" and related proposed prohibited transaction exemption amendments. Video recordings of the hearing were also made available on Dec. 19, 2023. Source: Napa-net.org Court and Legal Parties Strike Settlement in Excessive Fee Suit A billion-dollar plan has come to terms with participant plaintiffs represented by Capozzi Adler who had made claims the plan paid $77 per participant when plans of similar sizes were paying as little as $25 per participant. The suit had been filed against Advance Stores Company, the plan sponsor and a named fiduciary, as well as the Retirement Committee of Advance Auto Parts 401k Plan. Source: Napa-net.org »» Click here for more Court and Other Legal Issues State-Based Private-Sector Retirement Programs State Auto-IRA Assets Pass $1 Billion Milestone Cumulative assets across the first seven states to implement automated savings programs passed the $1 billion milestone in November and stood at $1.2 billion from 800,000 savers, as The Pew Charitable Trusts reported on Dec. 22. Not surprisingly given its population, CalSavers is responsible for much of the totals. Source: 401kspecialistmag.com Marketplace News Vestwell Raises $125M to Further Small Plan Push
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