Author Archives:
Erin Carter

The IRS recently issued Notice 2024-73, providing updated guidance for 403(b) retirement plans regarding the inclusion of long-term, part-time employees. A 403(b) plan is a retirement savings plan typically offered to employees of public schools, tax-exempt organizations, and certain religious institutions. Effective for plan years beginning after December 31, 2024, this guidance requires plan sponsors to expand plan eligibility to include long-term, part-time employees who meet specific criteria. These changes stem from the SECURE 2.0 Act, which introduced reforms aimed at enhancing retirement security for Americans, including part-time workers.

For years hardship distributions have helped participants deal with unexpected downturns that present serious financial challenges.  While these distributions have been available for several years, the SECURE Act 2.0 made important changes that streamline the administration process by allowing plan sponsors to accept participant self-certification. The change reduces the amount of paperwork and compliance hurdles for plan administrators.

The SECURE 2.0 Act of 2022 introduced several updates to retirement savings plans, including a new provision (Section 109) that allows employees ages 60 to 63 to make higher catch-up contributions starting in 2025. This change is designed to help individuals boost retirement savings during the critical final years leading up to retirement.

The SECURE 2.0 Act of 2022 has introduced important changes to retirement plans, particularly for long-term part-time (LTPT) employees. These changes will impact how companies manage retirement benefits, making it essential for plan sponsors to understand and implement the new requirements. With the 2025 deadline approaching, plan sponsors must take action now to ensure compliance and optimize their retirement plans.

Managing an employer-sponsored retirement plan can be a challenging task, especially for small companies. No shortage of regulations must be followed, including those in the Employee Income Retirement Security Act (ERISA) and mandated by the IRS. Matters become more complicated when a large plan status is reached because of increased scrutiny and compliance requirements such as an annual plan audit. In addition, updates such as those outlined in the SECURE Act 2.0 make it easy to see how unintentional mistakes can be easily made. While specific serious errors require the assistance of the IRS to remedy, most errors can be corrected through the Employee Plan Compliance Resolution System (EPCRS).

The Office of Management and Budget (OMB) has recently revised the Uniform Guidance, a set of rules governing how federal financial assistance is managed. These updates, effective October 1, 2024, aim to clarify existing guidelines, reduce administrative burdens, and enhance the efficiency and security of managing federal funds. There are several changes that those with a reporting obligation should consider reviewing as the updates will soon become effective.

Individuals facing emergency personal expenses or domestic abuse can now access retirement plan savings without the 10% penalty for early withdrawals. This useful option is available only for plans which have adopted this optional feature. The new feature, which became effective January 1, 2024, was ushered in through the SECURE Act 2.0 and was recently clarified in IRS Notice 2024-55. The recently published update provides important guidance for those considering enacting this optional feature as part of the company retirement plan.

The Corporate Transparency Act was passed in 2021 and became effective on January 1, 2024. The legislation aims to increase financial transparency and counter illicit financial activities, including money laundering and terrorist financing. To comply with the new regulations, many business owners are required to report Beneficial Ownership Information (BOI) to the Federal Crimes Enforcement Network (FinCEN). This includes personally identifiable information (PII) of each business owner, including taxpayer identification number, amongst other data points. The information is required to be submitted electronically on the FINCEN website.

The SECURE 2.0 Act, enacted in 2022, significantly enhances the original Setting Every Community Up for Retirement Enhancement Act. To improve retirement savings opportunities across the United States, it introduces over 90 provisions designed to expand access, improve flexibility, and encourage participation in employer-sponsored retirement plans. In light of this legislation, the IRS has released new guidance (Notice 2024-2) that targets critical facets of the legislation. This guidance is crucial for plan sponsors, ensuring they can both comply with the new regulations and optimize their retirement plan offerings. As the IRS is expected to issue more updates, plan sponsors must stay informed and prepared to adapt to these changes ahead.

Earlier this month, the Association of Certified Fraud Examiners (ACFE) issued Occupational Fraud 2024: A Report to the Nations. This is the 13th installation of the largest global study on occupational fraud and includes information about the costs, schemes, victims, and perpetrators of fraud. To limit the potential for criminal activities and financial loss, management needs to regularly evaluate and update fraud prevention programs to ensure maximum effectiveness. The findings contained in the report, including changes to how tips are reported, should be carefully considered.