Compliance Stuff

Takeaways Generally, plan sponsors should be prepared to implement the Roth catch-up rule for taxable years beginning after December 31, 2025 (i.e., January 1, 2026, for calendar year plans).  This will require coordination with ERISA counsel, the company’s payroll provider, and the plan’s recordkeeper and third-party administrator. Be prepared to discover mistakes and correct them quickly. Related Links Catch-Up Contributions Final Regulations Notice 2023-62 Article On September 16, 2025, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued Final Regulations (Treasury Decision 10033) under Section 603 of the SECURE 2.0 Act. Section 603, as enacted, generally requires that catch-up-eligible participants whose prior-year FICA wages exceeded $145,000 (as indexed) make all catch-up contributions as designated Roth contributions for taxable years beginning after December 31, 2023.  However, in Notice 2023-62, the IRS provided an administrative...

  Among the provisions of SECURE 2.0 (effective December 29, 2022) welcomed by plan sponsors were the additions to the Internal Revenue Code that a llow qualified plans to refrain from trying to recoup an “inadvertent benefit overpayment” (referred to here as an IBO), and from having to restore such payments to the plan.   In addition, the Code was amended to permit the treatment of such overpayments as eligible rollover distributions for certain purposes. The IRS has now addressed, via interim guidance in  Notice 2024-77  issued and generally effective October 15, 2024, some of the many questions that arise under the new Code IBO relief provisions. Before that date, a reasonable good faith compliance standard applies, and after that date following the guidance in the Notice will be considered compliance. Comments on the new guidance may be made to the Treasury Department by December 16, 2024 .  The following is a general summary of the major points of guidance...

The Internal Revenue Service recently announced its cost-of-living adjustments applicable to dollar limitations on benefits and contributions for retirement plans generally effective for Tax Year 2025 (see IRS  Notice 2024-80 ). Most notably, the limitation on annual salary deferrals into a 401(k) or 403(b) plan will increase to  $23,500 , and the dollar threshold for highly compensated employees will increase to  $160,000 . This year’s notice also includes the optional SECURE 2.0 Super Catch-up amounts for participants ages 61-63.  The more significant dollar limits for 2025 are [ included on this spreadsheet ]. Source(s): JacksonLewis , received on November 4, 2024.

A little more than three years ago, the U.S. Department of Labor (DOL) posted cybersecurity guidance on its website for ERISA plan fiduciaries. That guidance extended only to ERISA-covered retirement plans, despite health and welfare plans facing similar risks to participant data. Last Friday, the DOL’s Employee Benefits Security Administration (EBSA) issued Compliance Assistance Release No. 2024-01 . The EBSA’s purpose for the guidance was simple – confirm that the agency’s 2021 guidance generally applies to all ERISA-covered employee benefit plans, including health and welfare plans. In doing so, EBSA reiterated its view of the expanding role for ERISA plan fiduciaries relating to protecting plan data: “Responsible plan fiduciaries have an obligation to ensure proper mitigation of cybersecurity risks.“ In 2021, we outlined the DOL’s requirements for plan fiduciaries here, and in a subsequent post discussed DOL audit activity that followed shortly after the DOL issued its newly minted...

  On Labor Day 50 years ago, President Gerald Ford signed the Employee Retirement Income Security Act (ERISA) into law. ERISA , a long time in the making, has had notable successes—but also has led to much litigation and perhaps even contributed to the decline of pension plans. Congress drafted and revised the law after Studebaker closed its plant in South Bend, Ind., in 1963 and left many employees without the pensions they had been promised. ERISA has “accomplished much of what it set out to do,” said Lou Mazawey, an attorney with Groom Law Group in Washington, D.C. “Without ERISA, there would be far fewer workers with retirement savings and far fewer workers with robust health insurance,” said Juliana Reno, an attorney with Venable in New York City. However, ERISA also has become a weapon for plaintiffs’ attorneys to wield against retirement plan administrators and others in court. “We have seen in the past 10 years an explosion of litigation challenging the fees and investment...