The SECURE 2.0 Act of 2022 (SECURE 2.0) significantly changes the legal and administrative compliance landscape for U.S. retirement plans. Foley & Lardner LLP is authoring a series of articles that take a “deep dive” into key SECURE 2.0 provisions that will affect how employers structure and administer their 401(k) plans, pension plans, and other types of employer-sponsored retirement plans.
In our prior SECURE 2.0 articles, we have discussed student loans and 401(k) plan matching contributions, changes designed to simplify plan administration, changes to the minimum required distribution rules, and new and potentially easier ways to make withdrawals from retirement plans, with a focus on how they relate to 401(k) and other defined contribution plans.
This month, we focus specifically on SECURE 2.0 changes to small employer plans (Small Plans), including SIMPLE IRA Plans and SEPs. A SIMPLE IRA Plan is an abbreviated name for a Savings Incentive Match Plan for Employees, which allows employees and employers to contribute to traditional IRAs set up for employees. A SEP Plan is an abbreviated name for a Simplified Employee Pension, which provides small business owners with a simplified method to contribute toward their employees’ retirement through an individual retirement account or annuity. Small Plans generally have no more than 100 participants. The chart below is intended to be used as a reference for describing many of the Small Plan changes relative to current law, the type of plans affected, whether the change is mandatory or optional, and the effective date of the change.
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