March 2, 2020

What Do Employers Need to Know About the SECURE Act?

Answer:

The Setting Every Community Up for Retirement Enhancement (SECURE) Act became effective January 1, 2020. It makes many changes to how retirement plans are established and maintained. The Act increases the tax credit limit for plan start-up costs from $500 to $5000 per year for three years (plus an additional credit if an auto enrollment feature is added). An employer can now adopt a plan after year end, if by the tax return due date, and take a tax deduction for the year. A “safe harbor” feature can be added mid-year and without advance notice to participants, providing control and flexibility to the employer.

Employers can now offer safe harbor annuities as plan investment options that are portable to participants. Starting in 2021, employers can also participate in cost-effective “pooled plans” with other, unrelated employers. Annual participant statements will soon need to include what value of annuity can be purchased with a participant’s existing account balance. Long-term, part-time employees must now be given access to employer plans as well.

For more information on the SECURE Act, read HERE.

Liam K. HealyLiam K. Healy of Kerr Russell practice clients maintain compliance with state and federal tax laws that govern individuals and businesses focuses his practice on helping clients maintain compliance with the myriad of state and federal tax laws and regulations that govern individuals and businesses. A particular focus of Liam’s practice is in the area of employee benefits and ERISA. Liam specializes in designing pension and executive compensation plans to benefit business owners and executives. Liam regularly writes and speaks on the practice of tax and employee benefits law.

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