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Thursday, February 22, 2024

Hotly Anticipated Safe 2.0 Act Corrections Invoice Lands in Home and Senate


Fixing RMDs, SIMPLE IRAs, Starter 401(ok)s

Different Safe 2.0 sections addressed within the dialogue draft embody Part 107, which is designed to permit People to additional delay required minimal distributions, and Part 601, which is designed to permit SIMPLE IRA and Simplified Worker Pension (SEP) plans so as to add Roth options.

A problem recognized in Part 121 can be addressed, with the dialogue draft looking for to repair an inadvertent error that decreased the contribution restrict for the brand new Starter 401(ok)s.

Underneath the draft correction laws, the contribution limits of the Starter 401(ok)/403(b) plans would be the identical because the contribution restrict for particular person retirement accounts IRAs and shall be listed for inflation beginning in 2024.

Different corrections are made to Part 110, meant to reaffirm the potential to deal with scholar mortgage funds as elective deferrals for the aim of matching contributions in retirement plans, and to Part 125, which improves plan protection for part-time employees.

What Comes Subsequent

One business lobbyist who’s aware of the continuing legislative negotiations informed ThinkAdvisor that the push is already on to discover a piece of must-pass laws to which to connect the brand new Safe 2.0 corrections invoice.

Although many within the retirement business would favor to see the laws make it into legislation this yr — thereby permitting the IRS and different regulators sufficient time to promulgate guiding laws forward of vital implementation deadlines coded into the Safe 2.0 legislation — that will be a giant raise.

There’s merely a really restricted variety of legislative days remaining in 2023, and there’s a larger must head off a possible authorities shutdown that might strike as quickly as mid-January if a spending settlement isn’t reached by Democrats and Republicans.

Some of the probably expeditious pathways for passage can be for the corrections invoice to be folded into both of the 2 large spending packages that can must be handed sequentially in January and February to maintain the federal authorities open, however it’s tough to say whether or not that will occur, given the polarized nature of the controversy.

Credit score: Shutterstock

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