Compliance Corner: Q3 2024 – Upcoming Deadlines & SECURE 2.0 Updates
Upcoming Deadlines
With Q3 behind us, calendar year plans should have completed their 2023 annual plan administration and filed Form 5500 electronically—or be in the process of doing so. If you've received correspondence from Hunnex & Shoemaker regarding any outstanding items, please respond as soon as possible to ensure timely filings.
If you're considering plan changes for the 2025 plan year—such as adopting or modifying a safe harbor design, adding automatic enrollment, or making other adjustments—the deadline is quickly approaching. Contact your H&S Plan Administrator if you have questions.
Key compliance deadlines for 2023 calendar year plans:
October 15, 2024
Deadline for deductible contributions for the 2023 tax year for C-Corps and sole proprietorships (or LLCs taxed as such).
Also the extended deadline for filing Form 5500 and 5330, and for correcting minimum coverage or nondiscrimination testing failures.December 1, 2024
Deadline to provide 2025 plan year notices to participants (Safe Harbor, QDIA, Automatic Enrollment). Notices must be provided at least 30 days prior to the plan year start.December 31, 2024
Deadline for processing 2024 RMDs and for making corrective distributions subject to a 10% excise tax.
Automatic Enrollment Requirements Starting in 2025
As part of SECURE 2.0 legislation, plans established after December 29, 2022, must implement an automatic enrollment feature unless exempt. Automatic enrollment is viewed as a way to boost employee participation, and qualifying plans benefit from extended correction periods for deferral failures.
Exemptions include:
Employers with fewer than 10 employees
Businesses in operation less than 3 years
SIMPLE IRA plans
Governmental or church plans
IRS Clarification (Notice 2024-2)
The IRS clarified that for a 401(k) to be considered grandfathered (and thus exempt), it must have had a deferral feature adopted no later than December 29, 2022—even if the effective date was later (e.g., January 1, 2023). For 403(b) plans, the exemption is based on the establishment date alone.
Additional clarifications:
Spin-offs from grandfathered plans retain exempt status.
Mergers between grandfathered plans retain exemption.
Mergers between a new plan and a grandfathered plan may lose exempt status, unless under a qualified transition period due to a sale.
For multiple employer plans, exemption is determined by the adoption date of each participating employer—not the master plan's establishment date.
We are currently reaching out to affected plans to ensure they adopt the required automatic enrollment features before January 1, 2025. If you're unsure whether this applies to you, please contact your H&S Plan Administrator.
Increased Catch-Up Contributions Coming in 2025
Another SECURE 2.0 change impacts catch-up contributions. Currently, participants age 50+ can contribute an additional $7,500 annually.
Starting January 1, 2025, participants turning age 60–63 during the year may contribute up to $10,000 (indexed for inflation) or 150% of the standard catch-up limit, whichever is greater.
While this presents a strong opportunity to increase retirement savings for those nearing retirement, the IRS has yet to clarify whether offering the enhanced catch-up is optional or required. Until then, Hunnex & Shoemaker's default for preapproved plan documents is to allow these increased limits—assuming the plan already offers standard catch-up contributions.
Action Item:
Plan Sponsors should confirm with payroll providers that their systems can accommodate the higher limits starting in 2025.
Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice.
Written by: Sam Dart, on behalf of Hunnex & Shoemaker