Distributions and LT PT Employees-SECURE Act 2.0
The SECURE Act introduces several changes aimed at increasing retirement plan participation and flexibility, which are expected to lead to an increase in distribution requests.
Here's how these changes impact distribution requests and how our 3.16 distribution services can offer an effective solution:
Increased Participation:
Automatic Enrollment: The Act requires new 401(k) and 403(b) plans to automatically enroll eligible employees at a minimum of 3% of their salary. This will likely result in higher participation rates, leading to more participants requesting distributions.
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Expanded Eligibility: Long-term part-time employees who work at least 500 hours per year for three consecutive years are now eligible to participate in 401(k) plans, further increasing the number of participants.
Increased Flexibility:
Hardship Withdrawals: The Act makes it easier for participants to access funds in times of financial need by broadening the conditions under which hardship withdrawals can be taken.
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RMD Age Increase: The age for required minimum distributions (RMDs) has been raised from 701/2 to 72 (and will further increase to 75), allowing funds to grow longer but also leading to larger withdrawals when RMDs do commence.
With the anticipated increase in distribution requests, our 3.16 distribution services provide an essential solution for plan sponsors. Here's how we can help:
1. Streamlined Administration: We handle the complex and time-consuming tasks associated with processing distribution requests, ensuring compliance with the DOL and IRS.
2. Regulatory Expertise: Our team stays up-to-date with all regulatory changes, including the ever-changing RMD age, ensuring that all distributions are processed accurately.
3. Participant Support: We offer comprehensive support to participants, guiding them through the distribution process and helping them understand their options.
4. Efficiency and Accuracy: Our services ensure that distributions are handled promptly and accurately, reducing the administrative burden on plan sponsors and minimizing errors.
By leveraging our 3.16 distribution services, plan sponsors can efficiently manage the anticipated increase in distribution requests while ensuring compliance and providing excellent support to their participants.
Call 877.206.6290 to connect with a Regional Vice President to learn more.
About the author
Trinity Pension Consultants