On December 20, 2019, the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) was signed into law. Both the U.S. Senate and the House of Representatives overwhelmingly approved this important legislation with bipartisan support. Most provisions in the law went into effect on January 1, 2020; however, plans that are affected by the amendments required under this law will generally have until the first Plan Year beginning on or after January 1, 2022, or later if the Secretary of Treasury decides to extend this date.
In short, the SECURE Act will enhance the ability of Americans to save for retirement, provide new guidance to sponsors for the management of plans, and give employers better options to provide programs to employees who previously did not have retirement plan opportunities.
The SECURE Act is considered significant retirement security legislation because of a host of dynamic changes it puts forth and the ways they impact sponsors, employees, small businesses, and others.
With PenServ as your TPA, you can trust us to ensure that your plans and related activities are fully compliant with the SECURE Act and other applicable laws, and that you and your employees are realizing the best and most secure value for your investments.
This Newsletter will summarize some of the key elements of the SECURE Act, and how they may have an impact on you. Please contact your Plan Manager with any questions or for additional information.
The following provisions may have an impact to the Plan Sponsor/Employer of certain Defined Contribution (DC) retirement plans:
For complete details, download the PenServ e-News PDF.
The following provisions will affect participants in employer-sponsored retirement plans, as well as IRA account holders:
For complete details, download the PenServ e-News PDF.
In addition to the above provisions, the following should help Small Businesses in offering retirement plans to their employees:
For complete details, download the PenServ e-News PDF.
In addition to the above, there are several more provisions included in the SECURE Act, including the ability to consolidate annual reports for certain DC plans, expansion of qualified higher education expenses for Section 529 plans, the requirement for lifetime income disclosures on annual statements, and the removal of the ability to take loans from plans in the form of a credit card. This e-Newsletter is only meant to provide some material modifications made by the new law, and to help illustrate how these changes may affect your Plan.
We hope you’ve found this information to be useful, and encourage you to reach out to your Plan Manager with any questions you may have. Thank you for your business!