Part III | The SECURE Act 2.0: What You Need to Know

Feb 02, 2023

Below is part three of our five-part blog series on the Act. Read part one + two here. Be sure to bookmark!

The SECURE 2.0 Act of 2022 (the Act) was signed into law by President Biden on December 29, 2022 as part of the Consolidated Appropriations Act of 2023. Most of the Act’s provisions are intended to enhance coverage and participation in 401(k) and similar-type plans, such as a 403(b), particularly among small businesses that currently do not offer a retirement plan and industries that employ large swaths of part-time workers. There are some other provisions that apply to cash balance defined benefit plans and many others that impact all types of retirement plans.

A Deeper Dive: Provisions that affect Pooled Employer Plans (PEPs), Multiple Employer Plans (MEPs) and Groups of Plans (GoPs)
Provision Effective Date Summary
403(b) Plan MEPs and PEPs 2023 403(b) plans will be able to participate in MEPs and PEPs, subject to registration and reporting requirements similar to those that apply to traditional MEPs and PEPs. The statutory exception to the unified plan rule introduced in SECURE 1.0 is extended to cover eligible 403(b) MEPs and PEPs.
PEP Contribution Collection Procedures 2023 The PEP trustee responsibility for collecting contributions and implementing written contribution collection procedures that are reasonable, diligent, and systematic may be assigned to a trustee or any other named fiduciary of the PEP other than a participating employer beginning in 2023.
Retirement Plan Startup Costs Tax Credit Retroactive to SECURE Act 1.0 Confusion concerning how the tax credit applies to an eligible employer joining an existing MEP or PEP is resolved. Eligibility for the credit is based on the first year in which the MEP or PEP becomes effective with respect to the eligible employer.
GoP Audit Requirement Date of enactment Clarified that plans that would have been subject to the audit requirement absent participation in a GoP (i.e., plans with 100 or more participants) are subject to the audit requirement while participating in the GoP.

Next week, in part four of our five-part blog series, we’ll share additional defined benefit plan-specific provisions.

The SECURE Act 2.0: What You Need to Know

Join BPAS for a free webinar Wednesday, March 1st at 12:00 pm EST. With more than 90 new provisions, understanding the SECURE Act 2.0 may seem daunting–this webinar will summarize everything you need to know about how the Act will affect you and your employees now and into the future. Register here!

Questions or concerns about the new legislation? Contact your financial advisor or BPAS Participant Services.