The SECURE Act
Yesterday the “Setting Every Community Up for Retirement Enhancement Act of 2019’’, known as the “SECURE Act” was introduced in the House of Representatives to amend sections of the Internal Revenue Code impacting retirement savings plans. Some of the more significant proposals include:
- An increase in the cap for automatic enrollment safe harbor after 1st plan year from 10% to 15%
- Changes the non-elective contribution 401(k) safe harbor with the goal of providing greater flexibility to plan participants
- Creation of a new tax credit of up to $500 per year to employers to defray startup costs for new section 401(k) plans and SIMPLE IRA plans that include automatic enrollment with the stated goal of increasing employee participation and higher retirement savings
- A repeal of the prohibition on contributions to a traditional IRA by an individual who has attained age 70½ to account for the increasing number of people that continue employment beyond traditional retirement age
- Penalty-free withdrawals from retirement plans for individuals in case of birth of child or adoption
- An increase in the age to begin taking distributions from retirement plans from 70 ½ to 72 to account for the increases in life expectancy. This provision may be significant for custodians of retirement investment accounts and the reporting of potential unclaimed property.
To learn more about the SECURE Act, an overview of these and other provisions was drafted by the House Committee on Ways and Means: https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/SECURE%20Act%20section%20by%20section_0.pdf.
The full text of the SECURE Act can be accessed here: https://docs.house.gov/meetings/WM/WM00/20190402/109255/BILLS-116HR___ih.pdf
Please reach out to any member of the True Partners Unclaimed Property Management Team if you have any questions about this or any other developments likely to impact your company.