Whether you realize it or not, Congress often passes laws that impact your retirement plan. Recently, changes have been proposed to standing law that will impact how you manage your retirement plan(s) and remain in compliance.
Be on the lookout for these changes and speak to our team right away if you have questions.
1. EARN and SECURE 2.0
EARN and SECURE 2.0 are related pieces of legislation currently under consideration in the House and Senate. The House has already passed SECURE 2.0, legislation that has been discussed previously on our blog.
However, EARN is the Senate version of the bill. Also known as the Enhancing American Retirement Now Act, it contains several provisions that could soon impact how your retirement plans are managed. However, the two bodies must work together to craft legislation the President will sign.
If nothing else, be on the lookout for movement on these bills as they will eventually be merged or voted into law.
2. Enhanced Savings and Credits
Congress is looking for ways to make it easier for small businesses to provide retirement benefits to employees, while also providing additional saving incentives to employees.
Employers would be eligible for tax credits based on match contributions made in accordance with a modified safe harbor plan. These modified safe harbor provisions focus on enrolling employees in a retirement plan as quickly as possible and increasing their saving rates. Additionally, employees can qualify for tax credits which will be paid as a matching contribution instead of a cash credit.
3. Improved Hardship Distributions
While no one wants to pull money from their retirement account, they often have no choice. SECURE 2.0 and EARN might allow employees to withdraw funds from these accounts in a much more advantageous way. While details are not yet clear, employers may have the opportunity to offer much more flexible retirement plans to their staff, further demonstrating the value of these plans to prospects, new hires, and loyal employees alike.
4. Portability and Credits
Proposed rules under the new legislation would allow retirement plan providers to offer automatic portability. Plus, small businesses with fewer than 100 employees could receive a $500 credit when they opt in to these services.
Portability makes life easier for team members who move on to new jobs, lose their jobs, etc. With each improvement, these plans offer more value to staff while costing employers less and less money on the whole.
Contact Shore Tompkins for More Information on Legislative Changes Impacting Your Retirement Plans
Contact Shore Tompkins Actuarial Resources for more information on how recent legislative changes could impact your retirement plans. Remaining in compliance is key, and we have an expert staff ready to make adjustments, build a new program, or advise you on next steps.
4 Retirement Proposed Legislation Changes