Regulatory and Legislative

On December 29, 2022, President Biden signed the Consolidated Appropriations Act of 2023, which included the SECURE 2.0 Act.

Under current law, employers may allow participants age 50 and older to make catch-up contributions on a pretax or Roth basis.

Employers with 401(k) and 403(b) plans may allow participants to take a hardship distribution as long as the distribution is made on account of an immediate and heavy financial need, does not exceed the amount necessary to satisfy that need, and the participant does not have an alternative means reasonably available to satisfy such financial need.

The IRS has issued Notice 2023-73, specifying the mortality table used in determining minimum present value under IRC 417(e)(3) and ERISA section 205(g)(3).

Senators John Hickenlooper (D-CO) and Thom Tillis (R-NC), and Representatives Terri Sewell (D-AL) and Lloyd Smucker (R-PA) have re-introduced the Retirement Savings for Americans Act.

The IRS has issued Notice 2023-54 to provide transition relief for required minimum distributions in connection with the change in required beginning date to age 73 under SECURE 2.0, and guidance for certain specified RMDs for 2023.

Pension-Linked Emergency Savings Accounts

SECURE 2.0 is the hot topic in the retirement industry right now and has been hailed as the most important retirement enhancement legislation in more than a decade.

The SECURE 2.0 Act provides more ways for individuals to access their retirement savings and creates new exceptions to the 10% early distribution penalty tax.

The third phase of updates to Form 5500, Annual Return/Report of Employee Benefit Plan, was recently released.