February 2024

Fred Reish Addresses SECURE 2.0 With PLANSPONSOR

In “What’s Around the Corner?” PLANSPONSOR turned to benefits and executive compensation partner Fred Reish for insight on how plan sponsors should prepare and plan for 2024 under SECURE 2.0.

Reish said that SECURE 2.0 is already influencing small companies’ adoption of new plans and the design of larger ones. That trend will continue into this year and beyond, he observed. “For example, SECURE 2.0 mandated that all new 401(k) plans use automatic enrollment and deferral increases, meaning that more workers will be saving, and they’ll be saving more,” Reish noted. “For small employers, the tax credits for administrative costs and contributions will mean that plans will be close to free for the first three years.”

Reish also highlighted a plan option starting new this year. For all 401(k) plans, employers will be able to make matching contributions for qualified student loan payments. He added that this change will help employers recruit college students and help young college-educated employees save for retirement.

“The Department of Labor’s new proposed fiduciary regulation and exemptions will, if finalized [this year], provide additional protections for plan sponsors and their participating employees,” Reish explained. “Because of the fiduciary definition, virtually all investment-related recommendations to plan sponsors will be subject to a fiduciary standard — the highest standard in the law. Investment, distribution and rollover recommendations to participants will be similarly protected.”

The full article is available for PLANSPONSOR subscribers.

Full Article

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