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Tuesday, March 5, 2024

Lengthy-Awaited Safe 2.0 RMD Steering, and Extra, Anticipated This Yr


Ought to we anticipate to see extra Safe 2.0 steerage from Labor?

Sure. First, observe that Labor additionally has not too long ago issued proposed guidelines on the Safe 2.0 auto-portability provisions referring to the brand new automated roll-ins from a former employer’s plan to a brand new employer’s plan on behalf of job-changing individuals.

And sooner or later, vital steerage can be forthcoming from all three companies — Treasury/IRS, Labor and PBGC — in response to private-sector enter they’ve simply collectively requested on “consolidating, simplifying, standardizing, and bettering” reporting and disclosures, as required below Safe 2.0.

The objective is actually to make disclosures more practical whereas lowering compliance burdens.

Labor can also be counseling with IRS and Treasury because it prepares to gather information from plans and others with the intention to rise up an internet Misplaced & Discovered facility by 12 months finish to assist people find and maintain monitor of their retirement advantages.

Search for extra steerage on a wide range of different 2.0 points, together with Labor’s statutorily required report on Interpretive Bulletin 95-1 (largely centered on outlined profit pension threat transfers and fiduciary tasks concerning collection of DB plan annuity contract suppliers).

Labor additionally is anticipated to be issuing steerage on prohibited transaction procedures, QPAMs [qualified professional asset managers], deserted plans, and sufficient consideration for ESOPs [employee stock ownership plans].

And from Treasury and IRS?

At Treasury and IRS, search for steerage on employer matching of certified scholar mortgage funds, which took impact final month. (IRS and Treasury love acronyms, so scholar loans are “QSLPs.”)

That is the supply that allows 401(ok) plan sponsors to deal with scholar mortgage repayments as in the event that they have been elective deferrals for functions of offering employer matching contributions. As well as, forthcoming steerage on different Safe 2.0 points is anticipated so as to add to the current Treasury/IRS and Labor Division solutions to questions concerning pension-linked emergency saving accounts.

Finally, later this 12 months, we anticipate to be seeing remaining rules on required minimal distributions, steerage on standardization and streamlining of rollovers (mannequin normal types to be developed by Treasury/IRS with in depth business enter), on open questions concerning the required Rothification of catch-up contributions, on whether or not entities apart from plan sponsors may take part in offering the small (as much as $250) new out-of-plan taxable incentives to take part in a 401(ok), and on different Safe 2.0 provisions.

Discussions are also ongoing at Treasury and IRS and with stakeholders on easy methods to implement the brand new matching deposits below the expanded saver’s credit score/match for lower- and moderate-income plan individuals and IRA contributors, particularly since Safe 2.0 prohibits the match from being deposited in a Roth account.

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