Compliance Corner: Q4 2023 - Year-End Deadlines & 2024 Plan Limits
4th Quarter 2023 Updates for Plan Sponsors
Stay informed on regulatory updates and key action items for retirement plan sponsors as we close out 2023 and head into the new year.
2024 IRS Limits Announced
The IRS has released updated retirement plan contribution limits for 2024. Be sure to update these in your payroll system and apply the annual compensation cap when calculating employer contributions.
2024 Contribution Highlights:
Salary Deferral Limit (401(k) and 403(b)): $23,000
Catch-up Contribution (Age 50+): $7,500
DC Plan Limit: $69,000
DC Plan Limit w/ Catch-Up: $76,500
Compensation Cap: $345,000
Example:
Match: 100% up to 4%
Cap: $345,000
Max Match: $13,800
Year-End Checklist for Plan Sponsors
To prepare for the 2024 plan year:
Confirm all legal notices have been sent (401(k) Safe Harbor, QDIA, fee disclosures).
Review any operational changes and determine if plan amendments are required.
Update payroll systems with the new 2024 limits.
Prepare for the Long-Term Part-Time Employee (LTPTE) rule changes under the SECURE Act, effective 1/1/2024.
2023 Census Data Request
Expect to receive your request for 2023 census data in early January. Please return:
Final company census data
Annual questionnaire
W-3
ERISA Bond
Timely and accurate data is critical for successful year-end plan administration.
Increased Limit for Automatic Rollovers
Effective 2024, the mandatory cash-out limit increases from $5,000 to $7,000 per SECURE Act 2.0.
This can help reduce the number of former participants and lower associated administrative costs.
Unless you notify us otherwise, Hunnex & Shoemaker will implement this change automatically for plans using the $5,000 threshold.
Hardship Withdrawals: What You Need to Know
With economic stress increasing, hardship withdrawals are becoming more common. It’s critical that plans follow correct procedures to remain in compliance.
Qualifying Events (Safe Harbor):
Medical expenses
Home purchase (excluding mortgage)
Tuition and education-related expenses
Eviction or foreclosure prevention
Funeral expenses
Damage repair to primary residence
Disaster-related expenses
Documentation Requirements:
Previously, participants needed to submit evidence of hardship (e.g., repair estimates).
Under SECURE 2.0, plans may now allow full self-certification, though participants remain responsible for retaining documentation and following IRS rules.
Compliance Risk:
If hardship rules are not followed, the plan could face disqualification or fiduciary liability. If you have questions, reach out to your H&S Distribution Coordinator.
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