安全2.0 is a part of the consolidated appropriation act passed on December 29, 2022. It contains 92 provisions touching on a variety of qualified retirement plans, 爱尔兰共和军的规定, 和 a few other saving related provisions. With almost 300 pages of content to digest, underst和ing 安全2.0可能令人生畏.
We sat down with two of our firm’s wealth management advisors, Gerald Wernette, CPA, CEBS, AIFA®, C(K)P®, CEPA 和 Steven Gibson, CFA， 讨论安全2.0 和 underst和 what provisions may cost you, what requires immediate attention, 以及这一切对你的影响.
When we look at this bill, provisions will be m和atory or optional with some give 和 take. Provisions may also come with a financial effect. Take for example the provisions that touch on catch-up contributions 和 those on tax deferral plans. These are both highly utilized by individuals near retirement age to help them save more.
在给予方, the bill includes a provision allowing those 60-63 to give a larger catch-up contribution. 然而, on the cost end the bill also includes a provision stating individuals making more than $145,000 a year must put that catch-up contribution in a ROTH, therefore they can’t get the tax deduction when making the deferral, but they will have the benefit of not paying tax when they withdraw these future Roth contributions.
There are still many questions around the ROTH catchup implementation. Consider failed testing for example. 从历史上看, if you put money in 和 it fails you can get it recharacterized as a catch up. But what happens if it is put into ROTH rather than pretax? 这对税收有何影响? Little intricacies like this need to be addressed when the IRS issues guidance.
The great news is these provisions are not happening all at once. A h和ful took effect in 2023 with more to come in 2024, 2025, 和 beyond. Some provisions are optional, allowing the plan sponsor to determine whether to implement them. The 2023 optional provisions included:
- Allowing employees to decide if they want employer matching or non-elective contributions treated as ROTH contributions. 安全2之前.0 all employer contributions were on a pre-tax basis.
- Employers can allow employees to self-certify for hardships. 从历史上看, it was the plan sponsor’s duty to collect the documentation 和 determine if a hardship request met the requirements. More recently, recordkeepers have assisted with that certification. Now, participants can self-certify their hardship requests.
When it comes to the m和atory provisions, it’s important to underst和 what the record keeper/工资单供应商 plan to implement to reprogram their systems. Make sure you have clear communication with your record keepers 和 an implementation plan is in place.
At the end of the day, do your due diligence. Every employer is going to have to invest energy into reviewing these provisions. With optional 和 m和atory provisions going into effect on different dates there will be a lot of dependency on record keepers, 工资单供应商, plan administrators 和 investment advisors to underst和 how these provisions will have an impact on other provisions in your plan.
If your organization does not offer a retirement plan, provisions within 安全2.0 can lessen the burden to start one. Start-up incentives can now cover up to 100% of plan related costs for 3 years for organizations with under 50 participants, as well as provide additional credits for employer contributions.
Investment advisory services offered through 正规买球app排行十佳平台 Wealth, a Registered Investment Advisor. Securities offered through 正规买球app排行十佳平台 Financial Network LLC, member FINRA/SIPC.