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The most comprehensive pension reform in 20 years, the SECURE Act, is a step forward to allow people greater access to retirement plans.The act hopes to expand retirement savings while alleviating administrative headaches. As such, the SECURE Act includes incentives such as:
Tax credits for eligible employers are designed to alleviate some of the 401(k) start-up costs and incentivize businesses with 100 or fewer employees to offer a retirement plan.Two credits are available:
This equates to up to $5,500 a year, or $16,500 over three-years for an employer who takes advantage of both tax credits.
There are countless ways to design a retirement plan, from the type of plan and available features, to who is eligible and how much they can contribute. Here we highlight a few of the SECURE Act provisions that may enhance your retirement plan design for today’s generationally diverse workforce.
There are countless ways to design a retirement plan, from the type of plan and available features, to who is eligible and how much they can contribute.
The SECURE Act also aimed to alleviate some of the administrative burdens that come with managing a company-sponsored retirement plan.
Plan sponsors can easily switch to a safe harbor with non-elective contributions:
While this is a sampling of the exciting and beneficial elements of the most comprehensive retirement plan reform in two decades, there is so much more in the original and the upcoming SECURE Act 2.0.
This is where we come in. Contact us to learn more about the current features, requirements and options to enhance your retirement plan.
1. Bureau of Labor Statistics. “Labor Force Statistics from the Current Population Survey.” 2020.
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.
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