The Setting Every Community Up for Retirement Enhancement (SECURE) Act is the largest reform seen in more than a decade for retirement plans. Many of the provisions in the SECURE Act will require changes to how retirement plans are administered and how records are kept.
The SECURE Act helps employers provide more retirement plan options for employees. This is a good thing for employers and employees alike. However, there are things to consider if you are a retirement plan administrator.
The National Association for Plan Advisors (NAPA) has compiled a comprehensive list of the key SECURE Act provisions and effective dates. Below are some of the steps plan administrators need to be taking to ensure compliance with the new legislation:
- Delay of lifetime minimum required distributions (RMDs) from age 70 ½ to age 72 and the acceleration of post-death minimum RMDs will require changes to distribution forms, plan documents, participant communication/education, beneficiary forms and more.
- New limits for Safe Harbor plan limits will require changes to things like enrollment procedures and participant notices as well as changing processes for deferral elections.
- New eligibility for long-term part-time workers will require service providers to develop special eligibility and vesting provisions for impacted part-time workers.
- The penalties for failing to file an annual Form 5500 for a qualified retirement plan have increased ten-fold with a $250 fine per day, up to a maximum of $150,000 per annual report, along with the civil penalties already in place for plan administrators under ERISA and IRS Code. Service providers should review their service agreements and their late filing procedures.
Need help deciphering how this new law will impact your business? Join us for a live webinar on Tuesday, March 10 to learn more about how to best leverage this legislation to improve the retirement benefits you offer and steps you need to take when administering your plan. Sign up today.
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