IRS Interim Guidance Under Secure 2.0 On “Inadvertent Benefit Overpayments”
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...