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SECURE Act 2.0: Is Your Retirement Plan in Compliance?

By:  Braden Priest, CFA®, Retirement Plan Consultant

The SECURE Act 2.0 was signed into law by President Biden in December 2022 and is guaranteed to impact your retirement plan. Here are 3 key provisions you should be aware of to keep your retirement plan in compliance:

  1. Increased Participation for Long-Term Part-Time Workers

Many plans exclude employees who work less than 1,000 hours from participating in their retirement plan. Beginning in 2024, any employee who has worked at least 500 hours in the prior 3 consecutive years must be allowed to participate. The lookback period decreases to only 2 years beginning in 2025.

2. Catch-up Contributions for High Earners Are Changing

Beginning in 2024, all catch-up contributions for workers with wages over $145,000 (adjusted for inflation) during the previous year must be deposited into a Roth (i.e., after-tax) account. If your retirement plan does not currently offer a Roth contribution source, you may need to act quickly to ensure participants in this group may continue to make catch-up contributions.

3. Required Minimum Distributions (“RMDs’) Are Getting a Facelift

Several welcome changes are coming to RMDs. Already effective in 2023, the age at which a participant is required to begin taking RMDs has been increased from 72 to 73, and the age will ultimately rise to 75 in 2033. Beginning in 2024, participants will no longer be forced to take RMDs on any Roth balances in their account. This is great news for participants looking to avoid RMDs for retirement or estate planning purposes.

Optional Provisions to Enhance the Competitiveness of your Retirement Plan

SECURE Act 2.0 also affords plan sponsors a swath of new provisions that could benefit your employees. Items like higher catch-up contribution amounts, the ability to make employer contributions on a Roth basis, and providing employer matching contributions on student loan payments, might be of interest to your employees.

There are over 90 provisions included in this recent legislation, so speak with one of our Retirement Plan Advisors today to get more information on how you can take advantage of the SECURE Act 2.0 and turbocharge your retirement plan.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

BFSG Named One Of Barron’s “Top 100 Institutional Consulting Teams” For 2021

Benefit Financial Services Group (BFSG), a multi-faceted registered investment advisory firm serving both institutional and individual clients, is pleased to announce it has been ranked in Barron’s “Top 100 Institutional Consulting Teams” for 2021. The Barron’s listing can be seen here.

“BFSG serves as a fiduciary with every client and provides written acknowledgement of our fiduciary status. Our team-based approach ensures each of our clients has access to the knowledge and expertise
of our experienced retirement and investment professionals. We are proud that our team is raising the standards in the industry and our deep appreciation goes to our loyal clients and our dedicated professionals,” said Darren Stewart, a Principal, and Senior Retirement Plan Consultant at BFSG.

This annual ranking is performed by Barron’s. Registered Investment Advisors, Institutional Consultants, and Wealth Management Firms complete a questionnaire about their practice. Barron’s verifies the data
with the advisors’ firms and with regulatory databases and then they apply their rankings formula to the data to generate a ranking. The formula features three major categories of calculations: (1) Assets (2) Revenue (3) Quality of practice. In each of those categories they do multiple subcalculations. Barron’s measures the growth of advisors’ practices and their client retention. They also consider a wide range of qualitative factors, including the advisors’ experience, their advanced degrees and industry designations, the size, shape, and diversity of their teams, their charitable and philanthropic work and, of course, their compliance records.

Disclaimer: Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if the Firm is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of the Firm or its representatives by any of its clients. Rankings published by magazines and others are generally based exclusively on information prepared and/or submitted by the recognized adviser. The Firm did not pay a fee for inclusion on this list.