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Understanding the SECURE 2.0 Act: Impact on Employer-Sponsored 401(k) Plans

Doug Kronk • Sep 13, 2023

The recent enactment of the SECURE Act 2.0 has brought forth substantial changes that directly impact employer-sponsored 401(k) plans. You might be wondering how these changes will affect your current plan and what adjustments you need to consider. Let’s break down the key modifications that are set to unfold in the coming years.


Expansion of Eligibility for Part-Time Workers


One notable change revolves around part-time workers. Under the SECURE 2.0 Act, individuals working 500-999 hours annually for two consecutive years will now be eligible to participate in a company's 401(k) plan. This expanded eligibility aims to provide greater access to retirement benefits for a broader spectrum of employees.


Enhanced Support for Small Businesses


Starting in 2023, small businesses will receive increased support through a credit that covers up to 100% of the expenses associated with establishing a retirement plan. This provision aims to incentivize small enterprises to provide retirement benefits for their employees, fostering a more secure financial future.


Choice in Contribution Allocation


Another significant change allows employers to offer their employees the option of receiving vested matching contributions in Roth accounts. This flexibility empowers employees to tailor their retirement savings strategies to align with their financial goals and preferences.


Automatic Enrollment Mandate


By 2025, a pivotal change will mandate employers to automatically enroll employees in 401(k) and 403(b) plans. Exceptions exist for smaller businesses (those with less than ten employees), churches, and governmental plans. This step aims to bolster retirement savings by encouraging increased participation among employees.


These changes bring both opportunities and considerations for employers managing 401(k) plans. As these alterations may necessitate adjustments in your existing plan structures, it's crucial to navigate them effectively to ensure compliance and optimize benefits for your workforce.


Should you have any queries or require assistance in understanding and implementing adjustments in light of these new legislative changes, our team is here to help. We welcome the opportunity to discuss these changes, evaluate your plan, and ensure it aligns with the updated regulations.


Remember, staying informed and proactive is key to navigating these changes seamlessly.

How “Higher for Longer” Interest Rates Can Impact Your Investments

By Doug Kronk • 02 May, 2024
The stock market has had a rough ride this past month. The S&P 500 index closed out April at 5035.69, down over 200 points (-4.2%) since the close of March. Investors have become pessimistic and frustrated, and it’s largely because the deep interest-rate cuts that the market expected early in the year just aren’t materializing. The “good news” coming out of the Fed’s May 1 meeting was that Chairman Powell didn’t see any new rate INCREASES on the horizon. While there will certainly be opportunities to make money in a high interest rate stock market, investors would be well-served to evaluate their holdings and potentially make some changes.

Trusts and Tax Rates: Some Notable Considerations

By Doug Kronk • 04 Apr, 2024
Trusts are a legal entity that is commonly used to hold assets for future distribution or management purposes. For example, it is common for some families to create a trust to fund their children’s college education, contributing funds that the children can later withdraw to pay their college expenses while going to school. It is also common to place the family home and assets into a trust that will own the property, potentially indefinitely, to ensure the home, its furnishings, and additional assets always stay within the family. Trusts and taxes can become very complicated, however. To be certain that you make good decisions, it is advisable that you work with a team that specializes in this area to help clarify relevant issues, such as a financial advisor, CPA, and an attorney. 
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