The Washington Report

January 10, 2024

Note to Subscribers

While we do our best to provide timely updates, it is possible that the information shared in the newsletter may change after our publication deadline.

Retirement

 

EBSA Publishes Transcripts of Online Hearing on Proposed Retirement Security Rule; Related Proposed Exemption Amendments
On December 22, 2023, the Department of Labor announced that its Employee Benefits Security Administration (EBSA) published the unofficial transcripts of its online hearing on the Notice of Proposed Rulemaking, Retirement Security Rule: Definition of an Investment Advice Fiduciary and related proposed prohibited transaction exemption amendments, which was held on December 12 and 13, 2023. Video recordings of the hearing are also available.

The news release is available here.

The Retirement Security Rule: Definition of an Investment Advice Fiduciary and Related Exemptions Public Hearing website (including video recordings) is available here.

The unofficial hearing transcripts are available here (Day 1) and here (Day 2).

IRS Releases Guidance on Miscellaneous Changes Under the SECURE 2.0 Act
On December 20, 2023, the Internal Revenue Service (IRS) released Notice 2024-02, which provides guidance in the form of questions and answers with respect to certain provisions of the SECURE 2.0 Act of 2022. The Notice addresses issues under the following Sections of the SECURE 2.0 Act:

• 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 Savings Incentive Match Plan for Employees (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);
• Section 350 (safe harbor for correction of employee elective deferral failures);
• Section 501 (provisions relating to plan amendments);
• Section 601 (SIMPLE and Simplified Employee Pension Roth IRAs); and
• Section 604 (optional treatment of employer contributions or nonelective contributions as Roth contributions).

According to the IRS, the Notice “is not intended to provide comprehensive guidance as to the specific provisions of the SECURE 2.0 Act, but rather is intended to provide guidance on discreet issues to assist in commencing implementation of these provisions."

IRS Notice 2024-02 is available here.

IRS Publishes Notice on 2023 Cumulative List of Changes in Plan Qualification Requirements for Defined Contribution Qualified Pre-Approved Plans
On December 20, 2023, the IRS released Notice 2024-03, which provides the 2023 Cumulative List of Changes in Plan Qualification Requirements for Defined Contribution Qualified Pre-Approved Plans (2023 Cumulative List). The 2023 Cumulative List will assist pre-approved plan providers applying to the IRS for opinion letters for the fourth remedial amendment cycle for defined contribution qualified pre-approved plans (Cycle 4) under the IRS’s pre-approved plan program. The 2023 Cumulative List identifies recent changes in the qualification requirements of the Internal Revenue Code that were not taken into account during the first three remedial amendment cycles for defined contribution qualified pre-approved plans and that will be taken into account by the IRS with respect to the form of a plan submitted to the IRS for Cycle 4. The Cycle 4 submission period begins on February 1, 2024, and ends on January 31, 2025.

IRS Notice 2024-03 is available here.