The SECURE Act – A Primer on the Top Six SECURE Act Changes that could be coming to Retirement Plans Next Year

Matthew P. Chiarello • May 30, 2019

The SECURE Act (the “Act”) passed the House with bipartisan support and is on its way to the Senate with predictions that it could end up on the President’s desk by the end of the year. Here are some highlights of this potential legislation.

1. Longer Life means Later Mandatory Distributions. To account for increases in life expectancy, the Act would increase the age for required minimum distributions from 70 ½ to 72. The Act will also repeal the maximum age for traditional IRA contributions.

2. Auto-Enrollment Incentives. Automatic enrollment has been shown to increase both participation and higher savings, so to incentivize this plan design, the Act will provide a tax credit for small employers adopting plans with this design and increases the cap from 10% to 15% for automatic escalation in an automatic enrollment safe harbor plan.

3. Part-Timers Participation. Under the Act, employees that work at least 500 hours over three consecutive years will be eligible to participate in their employer’s defined contribution plan, thus, longer term part-timers, often ineligible, will now have a way in to their employer’s plans.

4. New Baby Withdrawal.  Participants will be able to withdraw a limited but penalty-free amount from their retirement funds for any qualified birth or adoption.

5. Lifetime Income Disclosures. The Act aims to provide participants in defined contribution plans with a tangible estimate of what they would receive, on a monthly basis, across their lifetime based on the current funds in their account. For many participants this could be an all-important wake-up call. Plan fiduciaries and sponsors will not have liability under ERISA for these disclosures as long as they are provided in accordance with the assumptions and guidance that will be issued by the Department of Labor.

6. New Pooled Employer Plans. The Act would allow two or more unrelated employers to join a pooled employer plan managed by a financial services institution that acts as the pooled plan provider. These “PEPs” may reduce administration thus realizing the economies of scale that small employers want but cannot currently achieve under MEPs.

 

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
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