The new Secure Act that takes into effect starting 2020 will allow for more individuals to qualify for 401(k) plans and will make things easier for employers. The new law will allow an increase from 10% of wages to 15% of wages in which they can automatically enroll workers in “safe harbor.” The new law will also give employers a $500 maximum tax credit if they create a 401(k) or Simple IRA with automatic enrollment. Part-time employees who work 1000 hours a year or have 3 years of 500 hours of service are now eligible to enroll in retirement plans from their employers. The Secure Act also allows employers to offer annuities as investment options withing 401(k) plans (the fear of legal liability if the annuity provider fails is now placed on insurance companies instead of the employer) and also widens to multiple employer plans for small businesses. For more information click here.
401(k)’s for Everyone
About the Author: Sarah Schultz
Sarah Schultz is a Staff Accountant in our Novato office.