Wasn’t it just summer? The year is flying by and that means the clock is ticking for qualified retirement plan amendments – with many requiring formal amendments by December 31, 2026.
While that may seem like a long way away, it really isn’t. Now is the time to start the process to ensure the changes required by federal law are made.
Although many plans have already been operating under these updated rules, their written documents may still need to catch up. And that means you should look at these updates as trying to score the winning point now – rather than before the end of the game. Afterall, waiting until the last second can make an already complicated compliance task much harder.
So, what do you need to know? There are three laws and multiple optional and mandatory changes looming.
Since 2019, the SECURE Act, CARES Act, and SECURE 2.0 Act have introduced significant changes affecting retirement plans.
The SECURE Act of 2019 changed required minimum distribution (RMD) rules, established new eligibility requirements for certain long-term part-time employees, and modified rules governing inherited retirement accounts.
The CARES Act of 2020, enacted during the COVID-19 pandemic, temporarily changed retirement plan rules involving coronavirus-related distributions, participant loans, and RMDs.
Then came SECURE 2.0 in 2022, which introduced another broad range of mandatory and optional retirement plan provisions, including changes involving automatic enrollment, catch-up contributions, RMDs, and other plan administration requirements.
Depending on the plan and the provisions adopted, amendments may be needed to address:
- CARES Act distribution and loan provisions
- 2020 RMD relief
- Changes to RMD ages and distribution requirements
- Long-term part-time employee eligibility
- Automatic enrollment and escalation provisions
- Roth catch-up contribution requirements
- Changes to cash-out thresholds and other distribution rules
Not every provision applies to every plan, so sponsors should determine which changes affect their plan.
Starting the review now gives plan sponsors an opportunity to compare what the plan document says with how the plan actually operates. This can help identify discrepancies before they become larger compliance concerns.
With the deadline approaching, now is the time to review your plan—not when the final whistle is about to blow. Early action can provide valuable time to resolve discrepancies, coordinate with recordkeepers, and complete required documentation.
For employers, getting ahead of the deadline can turn a last-minute compliance scramble into a well-managed process.
Do you still have questions about retirement planning options?
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