Will the New Administration Affect Your Retirement Plan?
As we all know, there is a new administration in Washington at the federal level. If you are the Plan Sponsor of a 401(k) plan, you may be wondering “what does this mean anything to me and my plan”? While we do not have a crystal ball and it is difficult to know for sure if there will be any changes to benefit plans from the new administration, we expect a few changes that may impact you:
- An increased focus on regulation. We may not know specifically where the increased focus will be, but we do expect the Biden administration to focus more heavily on regulation and enforcement of regulations that are currently on the books. The Department of Labor and Internal Revenue Service are the primary regulators for benefit plans. Expect increased enforcement of regulations from these two agencies. We anticipate more focus on participant benefits especially in the timeframe of COVID. The onus will be on employers to ensure they are providing all the benefits required.
- Pressure to enact the SECURE Act 2.0. Congress may be under increasing pressure to push through what is being called the SECURE Act 2.0. Major changes that are expected would be the ability of unrelated companies to bank together to offer a cost-effective benefit plan to their employees. This would be targeted to small businesses that have been especially hard hit by the pandemic and would provide a retirement savings vehicle to many more Americans that have the potential benefit today. This would help small businesses attract and retain talent. The proposed legislation would increase the Requirement Minimum Distribution age to 75. It would also require employers to offer the plan to long-term part-time workers. There are also incentives to companies to offer retirement plans if they do not do so already. Lastly, auto-enrollment would be required in certain circumstances to get more employees to take advantage of the retirement plan offerings. This bill is still in process so what will be included in any final version is yet to be determined but we do expect some action to be taken in this area.
- What about any Fiduciary Rule changes or implementation? The jury is still out here. We will be watching closely for any indication of movement in this area, but it is not clear at this point what direction the new administration will take in this area. It is more likely that some changes will be made but exactly what extent this will take is unclear.
Watch for continued blogs on our website as the new administration explains their new focus on benefit plans.
Retirement plans can be very complex. As an innovative firm, Summit CPA specializes in 401(k) audits. We have the ability to offer assistance entirely off-site with little or no distraction to your daily office routine. We also offer flat-fee pricing so there are no surprises on your bill when the job is complete. For assistance contact our office at (866) 497-9761 to schedule an appointment.