Compliance Stuff

Workers 55 and older now make up nearly a quarter of the US workforce and represent the labor force’s fastest growing age group. Further, while the Bureau of Labor Statistics projects that the overall labor force participation rate will slightly decline between 2020 and 2030, the rate for those in the 75-and-up age group is expected to grow by 96.5% during this same decade. What does an aging workforce mean for employers? This Insight will cover four key workplace law considerations as employees continue working later into their lives. 4 Key Compliance Considerations for Employers 1. Age Discrimination Risks An aging workforce heightens the importance of careful compliance with age discrimination laws. This is especially true in light of a recent AARP Research survey of workers age 50-plus, which showed that: 22% of respondents felt they were being pushed out of work because of their age; and 64% reported seeing or experiencing age discrimination in the workplace. The federal Age D...

The US Department of the Treasury and the Internal Revenue Service have finalized regulations under the SECURE 2.0 Act that change how certain retirement plan participants may make catch-up contributions. Beginning in 2026, participants whose income meets certain thresholds and who are eligible to make catch-up contributions may, in many cases, only be permitted to do so on a Roth (after-tax) basis.  While these rules apply to nearly all defined contribution retirement plans, they raise unique administrative and compliance challenges for multiemployer defined contribution plans, which are those defined contribution plans to which more than one employer is obligated to contribute and which are maintained pursuant to one or more collective bargaining agreements (CBAs) .  Although the rules include temporary relief for collectively bargained plans, multiemployer plans should begin planning now.  What the Final Regulations Require The Roth catch-up requirement applies only if...

  Beginning January 1, 2026, age 50+ catch‑up contributions for “high‑paid participants” of 401(k), 403(b), and governmental 457(b) retirement plans must be made on a Roth basis. As a result, employers must identify who is a “high-paid participant” and ensure that corresponding catch-up contributions are characterized as Roth — even if a participant’s standing catch-up deferral election is pre‑tax.   The Internal Revenue Service (IRS) recently released final regulations   implementing the mandatory Roth catch-up, which will create pressure points for payroll systems, retirement plan recordkeepers, and plan sponsors. This update summarizes the new mandatory Roth catch-up requirement, highlights selected issues for payroll and human resources to consider, and recommends solutions to reduce compliance risk.  The New Mandatory Roth Catch‑Up Rule Under final IRS regulations, a catch‑up eligible participant with FICA wages paid by applicable employer(s) above a wage thresh...

The  SECURE 2.0 Act of 2022 (SECURE 2.0) introduced  major changes to 401(k) plans, especially for small businesses. Three major changes take effect for plan years beginning after December 31, 2024 (January 1, 2025 for a calendar-based plan). They relate to automatic enrollment, long-term part-time eligibility, and catch-up contributions. As a small business owner, it’s crucial to understand the changes to ensure your 401(k) plan is compliant. Below we break down the SECURE 2.0 changes that will affect 401(k) plans for 2025, including practical steps to meet their requirements. If you need further assistance, contact your 401(k) provider. Automatic Enrollment in New Plans Automatic enrollment  is a 401(k) plan feature that automatically enrolls eligible employees at a preset default contribution rate, unless they actively opt out . The feature aims to simplify participation and increase retirement savings rates among employees. What’s New for 2025 SECURE 2.0 requires new ...

  Several provisions of the   SECURE Act 2.0 , passed in 2022, will take effect in 2025. Plan sponsors of defined benefit (DB) and defined contribution (DC) plans should begin reviewing the following changes to ensure compliance and address any questions before the new rules take effect. Mandatory Automatic Enrollment for DC Plans Under SECURE 2.0, 401(k) and 403(b) plans established after Dec. 29, 2022, will be required to implement an eligible automatic contribution arrangement (EACA) for plan years beginning after Dec. 31, 2024. This provision also applies to multiemployer DC plans that add a 401(k) feature. However, these multiemployer plans face challenges due to the complexity of coordinating payroll, tracking deferrals, and managing compliance for employees working for multiple employers. Congress is considering, but has not yet acted on, a technical corrections bill to SECURE 2.0 to provide technical amendments, clerical amendments, and clarifications of the law. This ...