The Secure Act 2.0 is poised to be signed into law with the goal of promoting retirement security among Americans. The bill contains dozens of provisions that will impact various aspects of retirement plans. As a plan sponsor, it’s helpful to understand how the Secure Act 2.0 will impact your organization and employees. Below are several major provisions contained within the legislation:
- RMD Age Increase Required Minimum Distribution age is increased to age 73 starting on January 1, 2023 and age 75 starting on January 1, 2033.
- Increased Catch-Up Limit to $10,000 for employees ages 60-64.
- Increased tax credits to offset start-up costs for new plans.
- Mandatory Automatic Enrollment and Automatic Escalation for new plans.
- Student Loan Payment Matching without hurting nondiscrimination testing.
- No Early Withdrawal Penalty for Emergency Withdrawals from a retirement plan.
- Long-Term Part-Time employees required eligibility reduced from 3 consecutive years with 500 hours of service to 2 consecutive years with 500 hours of service.
- For employees with income greater than $145,000, Catch-Up contributions must be made on a Roth basis.
For more information on the Secure Act 2.0 and how you can prepare for the changes, contact the team at Innovative Investment Fiduciaries, LLC by calling (856)-242-3343 or emailing firstname.lastname@example.org.