SECURE 2.0

Thanks to the SECURE 2.0 Act, certain employees will have more deferral opportunities beginning in 2025. Read below to learn how much employees can contribute to their retirement plan and about the types of deferrals that may be available.

Student Loan Repayments

Employers may now treat an employee’s qualified student loan payments like elective deferrals or after-tax contributions for purposes of providing an employer matching contribution.

The Internal Revenue Service has released Notice 2024-77, Guidance Under Sections 414(aa) and 402(c)(12) of the Internal Revenue Code with Respect to Inadvertent Benefit Overpayments.

For years, Congress and the IRS have addressed natural disasters (and others) with largely piecemeal responses. For example, when a major hurricane struck, the President would declare a federal disaster, Congress would grant certain relief, and the IRS would implement the details, such as determining the timing of allowable distributions from retirement plans and extending filing deadlines.

The IRS has issued Notice 2024-73, providing question-and-answer guidance on long-term, part-time employees in 403(b) plans. Guidance is applicable for plan years beginning after December 31, 2024.

In 2019, the SECURE Act made several changes to the rules for retirement plans and IRAs, including raising the applicable RMD age from 70½ to 72.

For plan years beginning after December 29, 2022, employers that sponsor 401(k) or 403(b) plans may offer employees a “de minimis” financial incentive, such as a gift card, as long as the cost of the incentive is paid by the employer and not paid from plan assets.

Employers that sponsor a SIMPLE plan may allow increased salary deferral limits for their employees, starting in tax year 2024.

The SECURE 2.0 Act contains provisions that allow individuals to place more of their assets into Roth accounts.

An employer that maintains a SIMPLE IRA plan is generally not permitted to maintain another retirement plan in which employees may accrue benefits—a principle known as the exclusive plan rule.