SECURE 2.0: Five Key Provisions for 2024
It’s been about nine months since Congress passed a handful of laws, collectively referred to as SECURE 2.0. SECURE 2.0 contained over 90 provisions (some mandatory, others optional) that have, or will impact retirement plans in a phased manner. Implementing certain provisions has been challenging for service providers as guidance has been requested, but not yet provided. As 2023 winds to an end, we look ahead to the status of five provisions in effect for 2024.
1.Roth Catch-Up Contribution Mandatory Provision – Effective for taxable years beginning after 12/31/2023
Provision Summary: Participants taking advantage of catch-up contributions and whose wages exceeded $145,000 in the prior calendar year must make those catch-up contributions on a Roth (after-tax) basis.
Update: This mandatory provision has given recordkeepers and payroll providers the most trouble as they race to upgrade or create new systems with the ability to administer this requirement. The IRS announced on August 25 some welcome relief as they extended the administrative transition period until 2026. The extension will give recordkeepers, payroll providers and sponsors additional time to create and test systems necessary to accommodate this provision.