In late December 2023, approximately one year after Congress enacted the Setting Every Community Up for Retirement Enhancement Act of 2022 (“SECURE 2.0”), the Internal Revenue Service (the “IRS”) released Notice 2024-2 (the “Notice”) providing much needed guidance, in the form of questions and answers, on 12 of the 90 new provisions added by SECURE
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IRS Announces 2024 Retirement Plan Limits: Modest Increases
The Internal Revenue Service announced the 2024 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2024. Most of the dollar limits, including the elective deferral contribution limit for 401(k), 403(b) and 457(b) plans, the annual compensation limit under 401(a)(17)…
SECURE 2.0: Two-Year Transition Relief Announced for Roth Catch-Up Contributions
Long-awaited guidance was received from the IRS on Friday related to the SECURE 2.0 requirement that catch-up contributions for high-income participants in 401(k), 403(b), and governmental 457(b) plans be made as Roth contributions. Notice 2023-62 provides for a 2-year administrative transition period that will be welcome relief to retirement plan sponsors and record keepers alike.…
IRS Proposes Regulations on Using Forfeitures in Qualified Retirement Plans
Introduction
On February 27, 2023, the Department of the Treasury (“Treasury”) and Internal Revenue Service (“IRS”) issued proposed regulations (the “Proposed Regulations”) relating to forfeitures in tax-qualified defined benefit and defined contribution plans. Forfeitures generally arise when a participant terminates employment before completing the required service for full vesting of employer contributions under the terms…
A Tale of Two Remedies: Preparing Employee Benefits Plans for the Sunset of Covid-19 Relief
On January 30, 2023, the Biden Administration announced that both the COVID-19 National Emergency and the Public Health Emergency (collectively, the “Emergency Declarations”) would end on May 11, 2023, sunsetting nearly three years of extended deadlines and certain mandates related to COVID-19 testing and vaccines applicable to employer-sponsored benefit plans. On March 29, 2023, the…
Locke Lord QuickStudy: Secure 2.0: Top Changes Affecting Retirement Plans
The Securing a Strong Retirement Act of 2022 (“SECURE 2.0”) was signed into law by President Joseph Biden on December 29, 2022 as part of the Consolidated Appropriations Act of 2023. SECURE 2.0 expands upon the retirement plan provisions contained in the Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”).
This…
IRS Expands Determination Letter Program to Include Individually-Designed 403(b) Plans
In Revenue Procedure 2022-40, the IRS recently expanded the determination letter program to allow applications by individually-designed 403(b) plans. This expansion will allow 403(b) plan sponsors to request a determination letter that expresses the IRS’ opinion that the plan’s terms (as stated in the plan document) meet the requirements under Section 403(b) of the…
SEC Adopts Final Clawback Rules
The SEC adopted long-awaited final rules that require the recovery of erroneously awarded incentive-based compensation of executive officers, as required by the Dodd-Frank Act. Under Rule 10D-1, each exchange must adopt listing standards that will apply to all listed issuers, with limited exceptions. Each issuer must adopt a clawback policy that complies with the requirements…
IRS Announces 2023 Retirement Plan Limits – Unprecedented Increases to All Limits
The Internal Revenue Service announced the 2023 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2023. All of the dollar limits, including the elective deferral contribution limit for 401(k), 403(b) and 457(b) plans, the annual compensation limit under 401(a)(17),…
IRS Extends Deadlines for Adopting CARES Act Amendments for Retirement Plans
On September 26, 2022, the Internal Revenue Service issued IRS Notice 2022-45, which extends the deadline for amending retirement plans to reflect certain optional and required changes under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and section 302 of Title III of the Taxpayer Certainty and Disaster Tax Relief Act of 2020…