Compliance Corner: Q1 2024 – Year-End Deadlines & Secure 2.0 Updates
Stay informed. Stay on track.
As we kick off 2024, it’s time to wrap up administrative tasks for the 2023 plan year and stay current with new regulatory changes. Below are key deadlines and updates from Hunnex & Shoemaker to help you maintain compliance and support your retirement plan success.
Upcoming Deadlines for 2024 Calendar-Year Plans
April 1 – File Form 1099-R for 2023 distributions. Ensure any participant required minimum distributions (RMDs) are completed.
April 15 – Deadline to refund excess 402(g)/415 contributions. Also the deadline for certain employers to make plan contributions (unless filing extension).
June 30 – Deadline for ADP/ACP refunds to HCEs for plans with automatic contributions. After this date, a 10% excise tax may apply.
July 31 – Deadline to file Form 5500 and 5330 without extension.
Spotlight: SECURE 2.0 Clarifications
The IRS has issued interim guidance to clarify major elements of the SECURE 2.0 Act. Key highlights include:
Required Auto-Enrollment
New plans established after December 29, 2022 must include auto-enrollment starting in 2025.
Plans merging or spinning off may retain exempt status depending on the plan’s origin and timing.
Employer Roth Contributions
Participants may elect to receive employer contributions as Roth (after-tax).
These must be irrevocably elected in advance and are reported on Form 1099-R.
Fully vested and excluded from certain compensation definitions.
De Minimis Incentives
Employers can offer up to $250 in non-plan incentives to encourage participation.
Must not come from plan assets and apply only to employees not already contributing.
Terminal Illness Distributions
Eligible employees may take distributions without early withdrawal penalties if they provide certification of a terminal illness from a physician.
Delayed Adoption Deadlines
Most plans have until Dec. 31, 2026 to adopt SECURE 2.0 amendments.
Governmental and public school plans have until Dec. 31, 2029.
Forfeiture Balance Reminder
Plan sponsors must monitor and use forfeiture balances annually, as required by the IRS. These are plan assets and must not be retained indefinitely. Proper usage includes:
Paying plan expenses
Reducing employer contributions
Reallocating to participants
Restoring balances for rehires
Failure to manage forfeitures could result in operational failures and increased audit risk.
If you have questions about your plan’s forfeiture balance or compliance responsibilities, contact your Plan Administrator.
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