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Prior to the end of 2023, Notice 2024-2 was issued from the Internal Revenue Service (“IRS”) providing guidance on miscellaneous changes to SECURE 2.0 Act of 2022 (“SECURE 2.0 Act). While Notice 2024-2 is not meant to provide “comprehensive guidance,” the IRS issued the guidance to address “discreet issues” in order to assist with implementing certain provisions under SECURE 2.0 Act. Notice 2024-2 focuses primarily on the following provisions:
Section 101 - expanding automatic enrollment in retirement plans
Section 102 - modification of credit for small employer pension plan startup costs
Section 112 - military spouse retirement plan eligibility credit for small employers
Section 113 - small immediate financial incentives for contributing to a plan
Section 117 - contribution limit for SIMPLE plans
Section 326 - exception to the additional tax on early distributions from qualified plans for individuals with a terminal illness
Section 332 - employers allowed to replace SIMPLE retirement accounts with safe harbor 401(k) plans during a year
Section 348 - cash balance plans
Section 350 - safe harbor for correction of employee elective deferral failures
Section 501 - provisions relating to plan amendments
Section 601 - SIMPLE and SEP ROTH IRAs
Section 604 - optional treatment of employer contributions or nonelective contributions as Roth contributions
In addition to addressing the above items, Notice 2024-2 also extended the deadline to amend retirement plans and incorporate required and discretionary plan amendments under SECURE Act, Section 104 of the Miners Act, section 2022 or 2203 of the CARES Act, section 302 of the Relief Act, and the SECURE 2.0 Act. Accordingly, the new deadlines to adopt plan amendments are as follows:
Qualified plans that are not governmental plans or collectively bargained: December 31, 2026;
Collectively bargained plans: December 31, 2028; and
Governmental plans: December 31, 2029.
Finally, Notice 2024-2 clearly informs us that we can expect to see more from the Department of Treasury and the IRS as they “continue to analyze various provisions of the SECURE 2.0 Act and anticipate issuing further guidance, including regulations, as appropriate.” Accordingly, while the extended deadlines to adopt plan amendments may provide a little breathing room for plan sponsors, many would also like to see the IRS address many of the other questions that remain with SECURE 2.0 and will welcome the additional guidance to come.
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