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Effective Now/Immediately (12/29/2022)• New Exclusions to the 10% early withdrawal penalty. - Qualified Disaster - Qualified Birth or Adoption - Terminally Ill• Employees may self-certify Hardship Distributions.• Employers may permit Matching Contributions be treated as Roth Contributions
2023 Provisions• Removal of some notices to unenrolled participants.• PEPs and MEPs allowed for 403(b) Plans.• Small Business start-up tax credit increased to 100% costs if <50 employees.• Small Business tax credit for employer contributions, max of $1,000 per employee for first year and gradually reduces over 5 years. Full credit available for employers with < 50 employees.• Simple and SEP Roth allowed
2024 Provisions• Auto-portability of participant accounts to new employer plan.• Retirement Savings Lost-and-Found Website.• Employer matching of student loan repayments allowed.• Catch up contributions must be Roth if participant earning over $145,000• No RMD’s required for Roth 401(k) or 403(b).• Automatic force out increased to $7,000• Emergency linked Savings Account can be mandated by the employer. Cap is $2,500 and is for non HCEs only.• Starter(k) Plans – For Employers that do not offer a retirement plan• New Exclusions to 10% early withdrawal penalty - Emergency distribution of $1,000 - Domestic Abuse• Higher Simple IRA contributions for small employers
2025 Provisions• New 401(k) and 403(b) Plans required to have auto-enroll of at least 3%, auto escalation of 1% per year with cap at 15% and must allow 90 days for participants to un-enroll.• Part-time employees with 500+ hours for 2 consecutive years eligible to defer.• Catch up contributions increased for savers between the ages of 60-63.
2026 Provisions• Annual paper statement requirement.• New Exclusion to 10% early withdrawal penalty - Qualifying Long-term Care Insurance premiums.
2027 Provisions• Refundable Savers Credit max of $2,000 for low-income savers. Credit deposited into retirement savings vehicle.
Congress.gov H.R.2617 - Consolidated Appropriations Act, 2023 (12/29/2022)Timeline intended for educational purposes only and includes summary of retirement plan changes signed into law on 12/29/2022.Not all changes are mandatory, and your retirement plan may differ.Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA) member FINRA/SIPC. RAA is separately owned andother entities and/or marketing names, products or services referenced here are independent of RAA.40 Shattuck Road Suite 306 Andover, MA 01810 (978) 689-6906