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.
Your Clients Impacted
- Clients nearing retirement
- Clients about to be new parents
- Small business owner clients
- Currently employed clients
Opportunities
- Sell more retirement plans with the new tax credits
- Increase assets under management with extended caps and the flexible Safe Harbor provision
- Sell more retirement plans with the new increased individual eligibility
- Quickly increase assets under management with the retroactive provision
- Growth in individuals and employers in need of retirement planning guidance with the IRA provision
We have a unique roster of skill and expertise. Trinity’s team of retirement plan consultants, relationship managers, administrators, and actuaries examine each client’s data to create a customized retirement plan that leverages the plan sponsor’s future financial potential.
Asset Increasing Provisions
| Provision | Effective Date |
| Up to a $5,000 tax credit for any start-up retirement plan ** | NOW |
| Up to $5,000 penalty-free withdrawals for individuals in case of birth or adoption ** | NOW |
| Up to a $500 tax credit for any start-up and existing retirement plan that adds automatic enrollment | NOW |
| Retirement plans adopted before the due date of the tax return for the taxable year can be treated as being adopted the previous year ** | NOW |
| Clarification of individuals that may be covered by plans maintained by church-controlled organizations | NOW (applies to years beginning before, on or after enactment) |
| Allows home health care workers to contribute to a retirement plan or IRA | NOW |
| Increased the required minimum distribution age from 70 ½ to 72 | NOW |
| Raised the automatic escalation cap from 10% of pay to 15% of pay | NOW |
| Will allow two or more unrelated employers to join a pooled employer plan | December 31st, 2020 |
| Requires employers to offer dual eligibility to full time and part-time (under 1,000 hours) employees | January 1st, 2021 |
Other Provisions Impacting your Retirement Plan Clients
| Provision | Effective Date |
| Minimum distribution rules for DC plans and IRAs require the entire account to be distributed by the 10th calendar year following the year of the employee or IRA owner's death | NOW |
| Allows to make a direct trustee-to-trustee transfer to another employer-sponsored retirement plan in the form of a qualified plan distribution annuity | NOW |
| Allows Plan Sponsors to switch to a Safe Harbor 401(k) plan with nonelective contributions at any time before the 30th day before the close of the plan year. | NOW |
| Changed the voluntary in-service distribution age for DB plans from 62 to 59 ½ * | NOW |
| Up to $150,000 penalty for failure to file Form 5500 ** | NOW |
| Requires benefit statements to include a lifetime income disclosure at least once a year | Final legislation pending |
* Provision applies to only Defined Benefit Plans
**Provision applies to both Defined Contribution and Defined Benefit Plans
About the author
Heather Craigg