The purpose of the SECURE Act legislation is to make it easier for individuals to save for retirement through their employer’s qualified retirement plan. The SECURE 2.0 Act continues to incentivize employers to start a new retirement plan and simplifies the enrollment process for employees to easily participate.
Below is a simplified history of the SECURE Act.
Effective immediately and began January 1st, 2023:
Increased startup tax credit to 100% of the administrative costs with 50 or less participants.
- Eligible businesses with 51-100 employees remain subject to the original SECURE Act provision: tax credit equal to 50% of administrative costs.
Additional 401(k) tax credit based on the amount contributed by the employer on behalf of employees, up to a per-employee cap of $1,000.
- 100% in the first and second year, 75% in the third year, 50% in the fourth year, 25% in fifth year, and no credit for tax year thereafter.
Raised the RMD age to 73 and reduces the penalty for failure to take an RMD to 25%
- The penalty is further reduced to 10% if corrected within a two-year correction window.
Contact your Regional Vice President Retirement Plan Sales to learn more.