Plan sponsors and administrators will face new opportunities as 2026 Secure Act 2.0 provisions come into effect. Take this time to prepare amendments to your plan document and educate your participants on upcoming changes. You should also review new provisions, both mandatory and optional, and begin strategizing how to include them in your plan. Kim Moore, Director and 401(k) practice leader, and Karen Hill, audit and assurance manager, were joined by Kristin Cortez, an audit and assurance supervisor with the firm, to provide actionable tips for evaluating and implementing these changes to ensure compliance and optimal benefits for your participants.
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Episode resources:
Narrator
Welcome to. 401K audit CPA success show where we're 100% focused on helping companies across the United States prepare for their 401K audit. If you have 100 eligible participants in your 401K plan, then this podcast is for you.
Kim Moore
Well, welcome everyone to this month's 401K CPA audit success show. I'm Kim. Audit director here at Anders and I'm joined again by Karen and Kristen, which if you've been listening to our podcast, you've seen on some previous podcasts. So welcome. Today's topic: We're going to talk about the Secure Act, which we have talked about before. So if you've been listening to our podcast, this will be a topic that you'll be a little bit familiar with, just as a reminder, a refresher for those. Who may not remember or may not have listened to some of those previous podcasts. The Secure Act is actually a congressional act, of course, passed by Congress. And it the secure is an acronym. SECUR. So it's an acronym for setting every community up for retirement enhancement. You know how Congress always has have this big, long name and then they? But they think, I think they come up with the acronym and then they come up with the name to make it fit the acronym.
Karen Hill
I think so, yes.
Kim Moore
But so anyways. It's a two-part congressional act because there was actually a secure original act that was passed a few years ago. Then the secure what's called Secure 2.0, which is kind of the second phase of the of the provisions that Congress wanted to put in place, it was passed back in 2022. So as of recording this podcast, it's a couple of years old. And it was a big, huge piece of legislation. It has in total something like 90 different provisions in it. But the provisions didn't all become effective immediately. So they are kind of spread out over time. So when we did our original podcast we focused a lot on those provisions that would become effective right away, those that would have been become effective in ‘23 and ’24. As we're recording this podcast where they're the end of 2024. We're looking ahead to 2025, particularly those things that are going to come into play for 2025. And then also looking at the end, we're going to be looking a little bit into 2026. By the time we get to 2026, you should have figured out from all of these various secure pieces which components that you want to include in your plan, which ones you have to include, we’ll talk a little bit about this more in a minute, which ones you have to include, ones you want to include because you will have to amend your plan document here coming up towards the end of 2026. So we’re coming into a period of time where there are going to be a lot of potential plan document changes again, and then an actual rewrite on your plan document. So. You want to make sure that you're prepared. You don't want to do that and then figure out you missed something because that can cost you and your plan some additional funds. So. I want to make sure to try to catch all of this up front. We also just kind of forewarn you. We all are heading into a a change in administration here at the federal government level. All signs are pointing to a kind of a an awareness that more action needs to be taken in the retirement planning space. Seems like the incoming administration is very open to that. So I would say watch for these podcasts, because we will try to keep you updated as soon as we find out any information on additional potential upcoming changes. Because at this point sitting here anticipating that there's probably going to be even more coming down the Pike, so. So watch this space. Watch for our podcast and we'll try to keep you as updated as we can. So with that. Let's first talk about. I don't Karen, if you want to get us started. If I'm just kind of sitting here thinking and, “Oh my gosh, she just said there's 90 provisions in here, what are the kinds of things that I should do just in general?” In evaluating the Secure Act?
Karen Hill
Well, you want to look and see which provisions are mandatory and which ones are optional. As you mentioned, some of them are optional and you don't necessarily have to include those in your plan, but there are mandatory ones that you will have to. So you want to figure out which ones are mandatory and if there's going to need to be any kind changes to the plan document to incorporate those. And then you want to look at the deadlines because - And we actually have laughed about this in the past amongst ourselves - that the provisions don't come into play at the same time. So you need to look and see which ones are applicable earlier and which ones are applicable later, and then figure out you know your plan on how to incorporate each of those and so that you meet the deadlines for those.
Then you you're going to want to assign that responsibilities for valuation and implementation. So if you have a team or something, if it's not just yourself, you have somebody else, some other people that are going to help you, you figure out who's going to do what in regards to getting these implemented or is there going to have to be amendments for the? Do you need to bring in the TPA and make sure that you follow up with those people to make to make sure that's all the required items are actually implemented? And as I mentioned, you probably want to bring in your TPA, your service provider, and they may be able to help you with implementation. Some areas they’ve probably looked into these already, so they have an idea of what needs to be done, especially if there's going to need to be amendments done. Last time they had an amendment that kind of covered a lot of it, because as we'll discuss later on, there is a deadline to have any amendment for the Secure Act 2.0 done, there's going to be a. For. So last time they kind of had a lot of them had one that covered everything. There is a good chance that your service provider may have that again for this one. This is important: as auditors, we know, do you need to document your work? You want to make sure that you look at you document how you evaluated these. Your decision making process and how you determine which ones of the optional ones to include or exclude. And that's going to help with your support, your compliance and you know, in case there's any questions, especially by your auditor, or if some, for whatever reason the IRS or DOL came in and looked at your plan, you can support what decisions that you made.
Kim Moore
Yeah, I think it's important, documentation because some of these, as Karen mentioned, are optional, so. Everything that Congress put in there, into the Secure Act, even the optional ones, are there for a reason. That they would benefit certain subsets of individuals. And so it's highly likely if you've got an educated workforce in your company that they might hear of something and think that the plan automatically would be able to offer that and maybe you either didn't know about it or you elected not to offer that and so that that could be problematic, then, if, your employee hears about it and they either think it's already there and it's not, or they're wondering why did you not incorporate that. Think. Would be a good idea just to document all of the different optional provisions and your decision. You know when we're not going to do this because of whatever and have that documented, just in case because I could see that coming up later as lawsuit potential material for someone if you're really harming them by not adopting something you know you not. Nothing wrong with your not adopting. That is totally allowed, but you just want to make sure that you have good rationale behind that to support yourself.
Karen Hill
Right. Because you never know if they if somebody does decide to sue, you never know how somebody else is going to interpret that. You want to make sure you have the rationale down.
Kim Moore
Absolutely. It also will help because there are so many different provisions. And as we've said, they come into effect at different times. So and we're going to talk about the amendment that's required here by the end of the of 2026, but you want to make sure when it's all said and done, you only amend once. And so you want to make sure that any optional provisions number one that your TPA knows about them, obviously because they're going to have to administer whatever options you're picking, but also that you get the plan document changed for all of that, and so you're not incorporating things that you're not actually wanting or vice versa, that you're leaving out things that you actually did incorporate and you are actually administering. That could be hugely problematic. So just keeping this list will be. So when you set down with the TPA and you're either you're working through the amendment or you're evaluating their proposed amendments, you can check it off to your list to make sure everything's there, so.
Karen Hill
Oh and lastly, I think this was the last one. Educate your participants on the changes you've made all these changes, and because of these regulations, you want to make sure that your participants are aware of them so they can take advantage of them if they need them. Because some of these are going to are going to allow their some of your employees to enter the plan when in prior years they wouldn't have been able to enter the plan. So you. You're going to want to let them know that they can take advantage of some of these new provisions. And they're probably going to need help to understand some of the changes. Again and again, this is another area where your service provider can likely help you. Maybe they'll come in and do you know when they get come in for an annual review? You talk to your employees. Can maybe do that? Might have some. Some web casts that you use, or maybe some sort of literature that you can hand out to the participants?
Kim Moore
And, you know. It doesn't do you any good to go through and do this evaluation and pick out the things that you think are going to be really beneficial to your employee base. And then you don't tell them because they won't be able to take advantage if you Don. If you don't tell them that, hey, we made a change and you know we all know there are required documents like a summary plan description. Documents that will those will all be. Revisited and rewritten and then redistributed the plan documents that are to the plan participants. Usually don't happen right away. It takes a while for those to get rewritten and get approved, and so you would be denying an employee the opportunity to take advantage of something. For a while, because they wouldn't know about it if you rely on those documents, so encourage you to, you know, just draft up a real quick e-mail letting everybody know this is going to be available to you. So you know, whenever the effective date is of something new or if you do regular benefit meetings with your employees, you know, just bring it up then. If you don't tell them, most people you know, I don't think the average person on the street knows anything about secure 2.0, so it's only those of us in the benefit world that that are really aware of it. I think you're going to have to explain to your employees what's coming up.
So yeah, good, good summary of you know, once you've kind of listened to this podcast. And. Really, if you haven't done that already for the earlier provisions of secure 2.0, probably good time to kind of catch yourself up. So go out and look at the other provisions that that have already been in play. Make sure. That you're all caught up and you've evaluated everything 'cause there were optional provisions in 23 and 24 as well. So we're not going to talk about those today. So you need to go back and look at previous documents and podcasts to catch up on those. So now let's dig into. 25 changes. So what's coming? New and different. I'm going to talk about the very first. To me, this is the biggest change and this is one of the bigger things that secure 2.0. There's two of them, and they were going to talk about these first two here 1st that I think are the big the big. Hitters and the big changes and this first one, we've actually seen a lot in current plans and this does impact existing plans of. This is not only if it's a new plan. This is even if you have a plan in existence. Today this will impact you. So going forward, this this begins in January, coming up here in, in what'll be a month as we're recording this podcast. If you have an employee that is at least age 20. So H21 or older and they have worked 500 hours minimum. In each of two successive years that you need to offer them eligibility into the plan, so it doesn't matter what their classification is. They're an hourly employee. They're salaried. They're part time. Considered. They're whatever classification put them in. It makes no difference if they fit that requirement. They're 21 or older, and they've worked two years of 500. Two consecutive years of 500 hours, you have to offer them participation in the plan.
Karen Hill
That's a pretty low threshold actually, because you can't full time is a little bit over 2000 hours.
Kim Moore
It is.
Karen Hill
So this is about 3 months worth of full time work, but maybe working 2 days. A. The whole year.
Kim Moore
That's right. And I know. Lot of. The folks. We've talked to over the years. Said, you know. Oh, well, part time we don't even consider them. Not benefit eligible you. They're just not even in the conversation or. Interns at which interns hopefully wouldn't be with you for two years, but they might be seasonal, but you know they're just. They're kind of pushed over to the side or they may have a grouping. Employees. Are maybe more clerical staff or maybe their maintenance staff or? You know, we've seen different. Different ways that companies have looked at it, but that group over. There. Oh no, they're not benefit eligible. Don't even consider them. This change invalidates all of that. So you no longer can say that group over there, we're not going to offer them the plan and you can't change your plan. To say I know that the secure access is but no, we're going to 'cause these people to be ineligible. Nope, you're not allowed to do that anymore, so. You got to look at all your employees and you got to keep track of this. You know, I see this as a pretty significant change for a lot of plans, just depending on the types of employees that you have and because it's hours based, it could be an administrative nightmare to be tracking because you may know historically that person doesn't work many hours. But what if all of a sudden they had a big project this year? They worked a lot of hours. And that lops over into next year. Now they've got two years of $500. Got. Be tracking that to know, are they? You know, get over that threshold and then you've got to offer them the plant. If you don't do this, you don't track. You don't offer to them. They come back five years down the road and say, hey, I should have been offered the plan. You didn't track. You didn't monitor it, you didn't offer it to. You are going to have to make up those contributions, not like you're going to come five years down the road and say, oh, well, I'm going to withhold five years of contributions out of your pay and you wouldn't want that. You know, it's awash. No, you're going to have to go back and fund five years. Of what? Have been contributions plus any match ET. So this could get very expensive if you if you ignore it and the employees find out about it, it's probably more than one employee. Know how employees talk so you could end up again. Could see this being. Lawsuit against an employee employer. For ignoring the situation, I think this one will start getting more attention. So I think employees are going to find out about it. So I would, I would put a big asterisk by this one, you know. For some folks. They're salaried, you know. Maybe this won't impact you, but if you have a lot of part time seasonal type. I think this is definitely going to impact. The other thing I would say is that it comes into effect at beginning of 2025. And we try to preach to folks. That this was coming. And so in 23 and 24, you should start tracking all of these individuals that fell into this category. Start up a spreadsheet because you've got to keep track of this. Now going forward for everybody in your in your company that fits into. Situation. And so you know, they may not work 500 hours this year, but they might next year. So that you've just got to keep. Keep track of it. So if you didn't do that, you may be going into 2025, the beginning of it, and you may need to be offering the plan to folks you don't even know about. If you didn't track that, you know that running history going into 2025 S.
You know we're. To get this word out to everybody. If you have not done that. Now is a good time to do it. You can offer the people the . And right away beginning, you know, whenever they would meet those eligibility requirements again, they got to be over the age of 21, you know, and if they elect not to participate. Totally. You've met your obligation. Then you've offered them the plan. You've still got to keep track, you know, so you still got to keep going, but I would make sure that you offer them the plan, especially in these situations. In some form in writing or confirming writing that they have declined participation, you know, an e-mail is. You know, if you want to have them sign a piece of paper, that's fine. If you've got an automated onboarding type process. And you keep track in. So they're signing, you know, online a document saying, no, I've elected not to participate. That's fine as long as you can provide that proof to anyone who might. The employee who might question it later on. Any type of DOL investigation that might come up later on your auditors are going to be asking, but you know all of these people that tend to look at paperwork, this is going to be an area I could see that that could come up and they could say. Well, they didn't. Never did. And if you don't have any documentation, then as far as the regulators are concerned, you didn't do this even though maybe you really did. Again, I think documentation you know, we always preach documentation, but I think in this case it's very important.
Kristin Cortez
Education, as I say, I think education in this area is going to be very important, especially for the part time employee who's been excluded from the plan. In some cases, maybe for years. Maybe they don't even pay attention to what.
Kim Moore
Yes.
Kristin Cortez
Communication is coming out about the plan, so now it's going to be, you know, even more important to educate all employees on this.
Kim Moore
I totally, totally agree.
Karen Hill
And yeah, and like I was just gonna say and like I said, it's really not a lot of hours if somebody I'm just thinking of my, my own daughter. I mean, granted, she doesn't meet the age 21, but.
Kristin Cortez
I mean. Think. Oops, sorry, go ahead.
Karen Hill
Her. She works two days during the week, about 5 hours, and then one shift on the weekend. 500 hours easily.
Kim Moore
Should I begin there?
Karen Hill
500 hours easily.
Kristin Cortez
Think it's great? I'm sorry.
Kim Moore
No, I was just gonna say you think of a lot of people that are working. You know restaurant work or their check out folks at various retail establishments, even seasonal employees that you bring in. And just for the you know the holidays type situation, you'd think, Oh well, they'd never get there. You know, I don't know. They might.
Karen Hill
Yeah, I'm thinking a lot of college students that that they don't work full time, so they never. Got this before. Once they reach age 21, yeah, they're going to. They're going to hit it.
Kristin Cortez
I think it was a great, you know thing to implement because like you're saying, college students are now given the chance to start planning for the future. And I'm noticing more and more of the younger generation in the early 20s are starting to really look at that look. Their retirement early on. And so this gives them that opportunity to start investing for their future, you know, while they're still just working part time so.
Kim Moore
And we all know that, you know, you don't have to contribute a lot if you leave it in the plan for a long time or to accumulate a lot of money. I I. Think it's a it's a good. I think Congress was well-intentioned, putting it in and. I think if you handle it properly and you educate your employees, Krista mentioned. Know you're really helping. You're helping your employee base a long way, so. So anyways, that's kind of the. Hit we're. To talk about a lot of little things here, but that I think is kind of the one of one of the big things. The other one, Chris, we're going to. Let you talk a little bit about this. The other one I think is a big hitter comes into play for 2025, but only impact someone setting up a new plan. A new 401K plan, a new 403B plan. So if you already have a plan. You. Kind of shut your headset off. A little bit. This wouldn't impact you, but only those that are just going to get ready to start up a. Now obviously it'll be this year and then going forward, so any new plans from 1125 forward, this will be true for.
Kristin Cortez
So any new plans starting in 2025 will now have an auto enrollment feature. So that means all your eligible employees will be automatically enrolled at a minimum of 3%. You can do a higher percentage up to 10%. And then it must have the auto escalation of 1% each year up to a total of 15%. Employees can opt out, but this is where I want to reiterate education. Education, education is so important for your employees because. You know, they need to know that. Can. Out prior to that automatic enrollment, because that can create a nightmare with payroll and. Later on, and you must incorporate the required notices. Obviously for all your auto enroll plans you got to put that in place. To start communicating to your employees early on about their automatic enrollment. So.
Kim Moore
Yeah, me, the providers will prepare a lot of those required disclosures, but sometimes they fall on. Who actually disseminate them? Kind of it's. And type things. So I would double check with your provider on whether they have sent those notices out or not, but that's going to become an issue going forward that they will be different disclosures than what you might have seen if you were a participant in the past. There's specific auto enrollment specific. And. Notices.
Kristin Cortez
And the other thing too, with the auto enrollment, it may also make your plan now be required to have an audit. So that is something to definitely look at and to keep track of.
Kim Moore
So you know the things that we see here, which is kind of counterintuitive, but employees, when they're given paperwork to sign up for the plan. More often than not, they won't sign it. The converse, if they are automatically enrolled and they're given paperwork or, you know, sign here to opt out more often or not, they will not opt out. So they won't. Whichever action they're required to take. Usually won't do it. So Congress is thinking. Is that all the new plans being auto enroll? Will get more people. Saving for their retirement versus forcing people to have to opt in to save for their retirement. Now, as Kristen mentioned, employees can always opt out if they can't afford to save. Or maybe they're they've already saved in another way. They're not forced to, but they need to affirmatively do something to opt out versus. You know, having to do it the other way around, that where they have to actually sign in. The other thing. We have seen in, in our experience with plans that have done auto enroll 'cause you can do auto enroll, you don't have to have this to force. To do it. You can have an existing plan and change over to auto enroll that that would be optional to you. The plans that have had auto enroll features, we do see the participation rates they just go through the roof. But if people wait to opt out. Until they actually see the deduction on their paychecks. Then you end up with a nightmare as Kristen mentioned, because then you end up with a whole bunch of accounts with. 5-10 dollars in them, and then you've got to get those distributed back out to the participants because you don't want to have hundreds of accounts sitting here that are very tiny amounts and you got to. Track of. Those people, especially if you have. A lot of turnover in your employee base that can become an administrative nightmare, so. So As for that, that education. Comes. So again, I see that as a pretty big change, only impacting new plans, but a big change nevertheless that does impact 403B plans as well. If you happen to be listening to this and you think you might be starting A403B. That applies to them as well. Another couple. Kind of quick hitters catch up. Contributions. We had ketchup contributions for many, many years. That's of course you get to a higher age and it the IRS rules allow you to contribute extra. Into your plan it it's a higher contribution limits and that additional amount above those the standard contribution is called. Catch up couple of changes here. Originally we had 2025 as the start date that if you are a highly compensated individual and I'm not going to go through the dollar amounts involved because those would change year to year. So you'd want to double check on the IRS website for what? That dollar. Is but once. Individual would hit that higher dollar amount. They want to make that catch up contribution amount. They would have to make it as a Roth contribution. Only Roth not pretax, would be allowed for those. That was actually changed because so many of the providers were screaming that this was going to be a huge administrative change in their systems to be able to administer this. So Congress came back and gave a little bit of leeway. So you now have until 2026. To implement that for your plan. Still, a provision you'll still have to do it. Just have. Little bit of extra time to do it. Could do it early if you want to, but you don't have to do it until 2026 so. Just want to let everybody know that that don't panic if you're not ready. You've got a little bit more time, but do start working on it because it will go into effect and I don't imagine they. Extend it any further. So probably by 2026 you're going to need to be ready to handle that. They also put a provision in now this is optional. So for those folks, it's a very probably small group of folks. That are aged 60 to . 3 So there are people on the lower end that could may catch up contributions. There are people on the higher end, so older than 63 that might be making. Might still be contributing. Might be making catch ups. This isn't affect any of them. It's only. Those four years. They're not. I'm not sure. I know. I'm not sure the rationale on that. Of. I can't, you know.
Karen Hill
I could understand waiting till. I don't understand why cutting it off after 63. That part doesn't make sense to me.
Kim Moore
But OK, yeah, as we've said before, don't ask me to. The federal government. We don't have enough time for that.
But anyways, beginning 1125, that group in their 60 to 63 in your employee base. They are allowed as in this. Now this is optional. Have to kind of negotiate this into your plan. That they could make an increased catch up contribution. Up to $10,000 or 50% of whatever the 2024 limit was.
That gives them a little bit. Even more. I think that the theory here is that you're nearing retirement, but you're probably not. Most people are not going to be actually retiring at 6061 in there, so we're going to give you a little bit more room because you're thinking about it and you might really want to be pushing to get that last little bit into your retirement account. I think that's the thought here. But again, this is this is optional so.
Karen Hill
By cleaning up at 63 makes no sense then, because what if somebody got started late and they really are trying to get money in there?
Kim Moore
Yeah.
Karen Hill
Yeah, I know, I. I know you don't. I know.
Kim Moore
I. Don't know the answer to that one. I thought it was very strange too, and I think it it becomes problematic just because it's age based and so different people obviously are going to turn these ages at different times. You can't just say, oh, at this point, you know, as of 11 we're doing. I mean it's it. So it is. Though so 2 caveats if you think. That's just too much. I don't want to do. You don't have to. You totally fine. Just ignore this and not do it. And if you do want to do it, you need to make sure that you've thought through the ramifications of doing it. And obviously I don't know if you really want to do this. If you've got a very young employee base that doesn't help them. Most of your people are young, so something to think about, but it isn't optional so. You know. We have account portability as our as our next kind of topic. And I want to go into a whole lot of details here because I think this is something you. Need to talk to your service provider about. But one. Congress has been concerned about is that folks that don't have a lot of money in a in a 401K. And they change employers. So I'm moving jobs from a player A to B. Cash out my phone case. Too much work to try to move. It's not enough money. I'll just cash it out now. Causes a lot of problems because obviously that money isn't staying invested, which leads to the long term problem. If people don't have enough money to save a retirement. It also causes additional taxes for the person because that money becomes taxable when they take it out, and they may not have planned for that and. So they can become problematic.
Kim Moore
Research that I was doing as I was prepping this at around 25% of the non retired folks that are working don't have any savings for retirement. 2/3 of those that are working, not retired yet, so that they don't. Know they don't have enough save so. Congress trying to address that we all know Social Security has got its. So relying on Social Security as your sole source of support once you cannot work any longer or you. Officially want to retire is probably not a good strategy. Congress put in place. Things in these laws to help you to be able to save and they want you to keep that money in. So again, on this particular topic, I would check with your provider to see what options you have available. Most companies have employee turnover and so this I think will impact everybody. I would. I will double check on that. Same thing here on required minimum distributions. The rules on the RMD keep changing. This starts affecting people once they get above the age of 70 and that required age keeps changing. So again, not knowing when you're going to be listening to this podcast again, if you feel like you have folks in your. And that fall into this category, there are over age 70 regardless of whether they're still working or. But as you start having aging folks in your plan, I would check with your provider on this particular area because there may be things that you need to be communicating out. To those affected employees. So those are a couple quick hitter things. Karen, you want to talk a little bit about, there's a long term care option here that I think is. A nice one to talk about.
Karen Hill
Yes, with this option, the participant can take a penalty free withdrawal of $2500 per year to pay for long term care insurance. It's optional, so this is one that you'll need to amend your plan for to in order for your participants to take advantage of it. And it's effective for distributions made after 12/29/2020. So you'll want to go ahead and evaluate this provision now, especially since you're going to have. Amend for it, but it is something that would be available for your participants.
Kim Moore
And I think as long term care is a nice offering, I know a lot of people are interested in that. That's something you might want to be kind of thinking about, because that would be a nice option. Some of those know we're running long on time. I'm going to just hit a couple of these really quick, but we mentioned earlier in the podcast that the plan amendments for the Secure Act 2.0 are due by the end of 2026. So 12/31/2026. That sounds like a long time, but as we all know, time flies and. Faster than a lot of us would like. And so there's a lot of work that you need to do to make sure that you that you handle this appropriately. And what usually happens again, you want to check with your service provider, but these kinds of changes. Your providers will usually do those for free. I mean, they can always charge for whatever they want, but a lot of times they'll do this as part of your. Package that you're paying for. And so that's a one time shot for you to incorporate anything else that you might want to get put in there and not have to pay separately for it. Usually if you come along and you say, hey, provider, I want to add you know auto enrollment to my. I've never had that before, but I want to do that. Have to pay to get that plan. Summary Plane description changed and the administration changed. And it can be quite. So this is a good time. Number one, make sure that you're getting your plan updated for this year because that is required. Make sure that as your provider is doing the changes that you're making sure everything got incorporated. Should. And all those optional things that you elected. Are included and or not included. You know if you didn't elect them and then anything else that you might want to incorporate, it's a good time to. To your provider. Kind of get teed up for that because that work will be starting. Probably late 25 and into 26 to make sure that it gets done before the. So now is a good time to to be thinking about that and making sure that everything gets incorporated in it. And then also getting ready for your. Employee education that we've kind of talked about in this summer. Plan descriptions will be revised and coming out and that may cause. You know, additional discussion with employees. So those are all good things to talk about. The last thing I wanted to mention, and I'm going to run through these real quick, so if you have any questions, let me know. The secure two point. The first batch of stuff that got implemented, and that was some of which was optional that we talked about in prior podcast. We said at the time that, you know, Congress put these rules out, but it's up to the IRS and DOL to actually implement them. And to figure out how, how are you going to administer that within a plan? And some of it was? Kind of complicated. And so the IRS has. During 2024. Some additional information in the following areas I'm going to. Through. If these are areas that pique your interest, I would go check the IRS website and look on these specific topics and you should find IRS bulletins on each one of these items. And that will. You specific instructions if you want to implement them within your plan or give you more information if. Doing that so. Auto enrollments was one which was an earlier conversation. And the financial incentives are incentives. Folks to. Up a plan if you didn't have. And so there was additional guidance put out on that. Um, there were provisions for distributions related to personal. So kind of saving account type account you could put into your plan as well as domestic abuse. Victim. So additional guidance put out around that. Required minimum. I think you're going to hear a lot about that over the next couple years because keep changing it, the matching student loan repayment program. So this was where you're going to take an employee is making a student loan repayment to wherever they took. The the loan from whether that's a bank or maybe a federal type loan Rep. And you're going. Match. So it's a way for them to be making contributions that they may otherwise not be able to make, because you're considering that loan repayment as a contribution. So additional guidance issued around that, this automatic portability that we talked a little bit about where you can move your account from 1 employer to another as you're changing positions. Additional guidance given out on that. There is also additional guidance on purchasing annuities inside a plan that's been. Kind of a hot button topic for a while, so the IRS gave some new guidance on that. The last thing I had on my list to just mention that was a part of secure 2.0. The DOL was given the mandate to set up a database to. What are called lost participants and we talked about lost participants on. Before. So those are participants. Folks are still in your plan. They still have an account balance, but they left your employee. And maybe they left ten years ago and you don't know where they. You don't have any good contact information. You can't get ahold of them. You want them to take their money out, but you just can't get ahold of them. Maybe you've even sent them a hard copy check and it never got cash because it went to the wrong address. There is now a database up and running and there are there's more information available. Available again on the IRS. I would go out and check that out. You are required as a plan sponsor to make every attempt to get that money to the actual plan participant that is owed that money. And so this is a a mechanism to try to help you with that, so. So that. Out there and available now, and I would encourage you to go check that out and probably more will be coming out about that over the next several months because that's something they really want to be want to be pushing.
Karen Hill
I know we ran into that really quickly.
Kim Moore
There was a lot there, Karen. Kristen, any last. Before we kind of wrap this up.
Kristin Cortez
Yeah, I'm. I just want to say, you know, reiterate, make sure your documentation is in place as you go through this process because your auditors will be asking for it. Make sure you have copies of all your amendments, your plan, your new plan. Your summary plan description. And this is a good time to really start looking at processes to make sure you have the processes in place to track eligibility, you know, and if you don't put them in place now and do a look back over 2023 and 2024 because you. To have to. And your auditor is going to. Asking for that so.
Kim Moore
We're going to be asking whether you've got it or not. Still going to.
Kristin Cortez
Are you asking and get board? Keep board minutes on everything you discuss as a as your management team in regards to all this.
Kim Moore
Absolutely. And it it's interesting, you mentioned this because I just. We have a questionnaire we send to all of our audience every year and I just updated the questionnaire for next year and this went on it about secure 2.0 because we're going to be getting that point where. It's going to become a question and that will become a problem if you do not update your plan that is going to become an issue that will come up in your audit. If you have not done. So yeah. Very good, very good. No, there, Kristen. Anything else anybody's got? Well, we want to thank you for listening to this month's podcast and we will be getting our notes and everything together to get started in the new year with some new thoughts and we'll be trying to take a look at the new administration and. What's coming out of that with regard to your benefit plans? Thank you everyone for listening.
Narrator
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