The workplace compliance landscape is constantly evolving, and 2024 brings several significant changes that HR managers need to understand. With the implementation of the SECURE 2.0 Act, mastering these changes is crucial for maintaining compliance and maximizing benefits for your employees.
One of the most impactful changes is the elimination of required minimum distributions (RMDs) for Roth accounts. This adjustment means participants may need to revisit and modify their withdrawal strategies.
Beginning in 2025, employees ages 60-63 will be given the opportunity to save more in catch-up contribution limits, saving the greater of $10,000 or 150% of the current limit. For example, using the current 2024 catch-up limit of $7,500, someone aged 60 will be permitted to contribute $11,250.
A groundbreaking change is matching student loan payments within retirement plans. This provision helps employees manage student debt while simultaneously preparing for their future.
The introduction of “sidecar” accounts provides employees with a structured way to save for emergencies, adding an extra layer of financial security.
Bloomberg Law details, “Under the SECURE Act rules, which applied only to § 401(k) plans because they amended Code § 401(k)(2)(D) and added Code § 401(k)(15), employees who complete three consecutive 12-month periods during which they complete at least 500 hours of service, and who otherwise meets the plan's age and entry date requirements, must become eligible to make elective deferrals to the plan. Employees who satisfy these service requirements are referred to as long-term part-time employees. Public Law No. 116-94, Div. O, § 112.”
In layman's terms, long-term part-time employees can participate in a company's plan after working at least 500 hours for three consecutive years.
TruePlan put together a two-part SECURE 2.0 Discussion Series. Check out Session 1 and Session 2 to get a full grasp of the changes.
You can also get a full compliance overview using this downloadable SECURE 2.0 Act guide.
TruePlan specializes in guiding organizations through these complex changes, providing additional compliance tools. Our team can help you review and analyze the new provisions to identify opportunities that best serve your organization and employees.
Ready to take the next step? Contact us today to learn how we can help you stay compliant and maximize your retirement plan.