Since 2019, Congress has enacted three major pieces of legislation impacting retirement plans, significantly changing the retirement landscape. The legislation contained a number of amendments to the Internal Revenue Code and the Employee Retirement Income Security Act, as amended, that impact employer-sponsored retirement plans (e.g., 401(k) plans, 403(b) plans, defined benefit plans, and even Puerto Rico plans).
In a nutshell, the legislation we’re talking about includes:
- SECURE Act (1.0). Signed into law on December 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was by far the most significant overhaul of the retirement plan landscape since the Pension Protection Act of 2006. Click here and here for more information.
- CARES Act. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. The CARES Act included provisions that provided a much-needed lifeline for participants during the unprecedented COVID-19 pandemic. Click here for more information.
- SECURE Act 2.0. SECURE 2.0 made even more changes to the retirement plan landscape (90+), with phased effective dates. Many of the mandatory provisions are already effective. Click here for more information.
Some of the changes impacting retirement plans are mandatory (i.e., they MUST be adopted), while others are optional (i.e., they MAY be adopted at the election of the plan sponsor). Also, many of the mandatory provisions are already in effect, meaning that plans must currently be complying with some of these provisions from an operational perspective. The IRS and DOL have been hard at work on issuing regulations and other guidance on many of these provisions, and we’ve been given some additional time to adopt any necessary plan amendments. However, the deadline for adopting most amendments is December 31, 2026, which is fast approaching.
Because there have been so many mandatory and optional changes impacting retirement plans, our team has prepared a tool/checklist that our clients can use to review the plan and figure out what, if anything, plan sponsors must do to get their documents in compliance with all of these new rules by the December 31, 2026 amendment deadline.
For plans that use a pre-approved document, these changes and the December 31, 2026 amendment deadline still apply, but the draft amendments will be prepared by the pre-approved provider. In the interim, we recommend reviewing the checklist with your Seyfarth Shaw attorney to confirm that all mandatory provisions have been/will be implemented, and to identify any optional changes the plan sponsor has adopted/would like to adopt.
We encourage you to speak with your Seyfarth Shaw attorney ASAP regarding your retirement plan and next steps.