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Description
On December 22, 2022, the House of Representative voted to pass the Consolidated Appropriations Act, 2023, the 4,155 page, $1.7 trillion spending bill, President Biden has pledged to sign into law. The core of the bill consists of provisions needed to fund the operations of the federal government, but division T is the texts of the Setting Every Community Up for Retirement Enhancement (SECURE 2.0) Act, a 358 -page package of retirement and general financial security provisions.
This course will provide financial professionals information on specific provisions that will have a big effect on their clients’ life insurance, annuity, and retirement plan options.
Learning Objectives
Upon completion of this course, you will be able to:
• Describe the background and purpose of the SECURE 2.0 Act;
• Explain the following primary provisions of the SECURE 2.0 Act
o An increase in the age for RMDs to age 75
o Catch-up contribution adjustments for taxpayers aged 60-63
o The transfer of 529 plans to Roth IRAs
o Inflation adjustments for catch-up contributions
o Expanded savers matches
o Removal of the 25% qualified life annuity limitation
o An increase in the QLAC limitation to $200,000
o A special provision for qualified birth or adoption distribution
o Changes to employee certification of deemed hardship distribution
o Modifications to the statute of limitations for excess contributions
o Penalty-free withdrawals from retirement plans in the case of domestic abuse
o Retroactive first-year elective deferrals for sole proprietors
o Modification of the treatment of IRAs involved in prohibited transactions
o Important clarifications of the 10% excise tax when transfers are made to an IRC § 72(t) SEPP plan.
o Instructions for the Treasury to issue legislative regulations on rollovers by January 1st, 2025
o Special provisions that Roth 401(k) plans will no longer be subject to the RMD rules
o A new exception to the 10% penalty under early distributions from qualified plans for individuals with a terminal illness
o Provisions that will allow a surviving spouse to elect to be treated as the employee of a qualified plan participant. This is an especially important provision for asset protection purposes in that the surviving spouse would seemingly be protected by ERISA.
o Changes in the exemption for early withdrawals for the age 50 rule to age 50 or 25 years of service.
o Special rules for the use of retirement funds in connection with qualified disasters
o The elimination of the 10% excise tax on corrective distributions of excess contributions
o The treatment of student loans as elective deferrals for purposes of matching contributions
o The modification of the rules providing for withdrawals for emergency expenses
o A new provision allowing for non-elective contributions to SIMPLE plans
o A reduction in the late RMD excise tax from 50% to 25%
o A one-time election for qualified charitable contributions to charitable remainder trusts
o An important modification of the RMD Rules for special needs trusts apparently addressing the concern in the SECURE Regulations regarding Medicaid repayment provisions under state law.