4th Quarter Compliance Reminders
August 28, 2024
As we approach the end of 2024, there are plenty of important deadlines to be mindful of. Staying on top of these deadlines contributes to the ongoing compliance of your plan and provides a seamless experience for your employees.
New SECURE Act 2.0 | Long-term part-time employees
Starting in the 2025 plan year, the SECURE Act 2.0 lets part-time employees who've worked at least 500 hours for two consecutive years join the company's 401(k) plan. Here's a quick guide for employers:
- January 1, 2025: Part-time employees who work 500 hours/year for 2 consecutive years are eligible to participate in the company’s 401(k) plan.
- Check your records: Look at your employee data to see who'll be eligible.
- Talk to them: Once you know who's eligible, tell them about their new 401(k) options.
Doing this early helps get your part-time employees smoothly onboard with their new benefits.
Q4 Compliance Highlights*
October 15
- If on extension, filing deadline for the Form 5500
- If on extension, filing deadline for individual and/or corporate tax returns and final contribution deadline for deductibility
- Adopting a retroactive amendment to correct minimum coverage or nondiscrimination requirements (IRC Sections 410(b) & 401(a)(4))
December 1
- Sending annual 401(k) and safe harbor match notice*
- Sending annual Qualified Default Investment Alternative (QDIA) notice*
- Sending annual automatic contribution arrangement notice (ACA)*
- It's important to send these notices at least 30 days (and not more than 90 days) before the beginning of each plan year.
December 15
- If on extension, deadline for distributing SAR to participants*
December 31
- Processing corrective distributions for failed ADP/ACP test to avoid the 10% excise tax
- Correcting a failed ADP/ACP test with qualified nonelective contributions (QNECs)
- Converting existing 401(k) plan to safe harbor non-elective design for current plan year
- Amendment to remove or convert to safe harbor status for next plan year
- Amending plan for discretionary changes implemented during plan year (certain exceptions apply)
- RMDs due under IRC Section 401(a)(9) to avoid penalties
When most people think about retirement plans and pensions, what comes to mind are the big-name players: government systems, large corporations, and the financial institutions that support them such as banks, brokers, and investment firms. These organizations tend to be the visible “faces” of retirement savings, managing assets, issuing account statements, and promoting their expertise through marketing and media. But behind the scenes, there’s another essential player who often goes unnoticed: the Third-Party Administrator, or TPA. In a previous post, we explored how TPAs have emerged to meet vital client needs that large investment firms often overlook, such as tailored plan design, compliance, and personalized service. If you missed that article, click here to read it before diving into today’s topics: The risks of relying solely on asset-driven providers, and why personalized plan administration still matters.
Navigating the numerous retirement plans offered in the marketplace can be confusing, even before considering the many myths surrounding the topic. In our work with clients, we hear about these misconceptions that often steer employers in the wrong direction. In this second installment of an ongoing “myth-buster” blog series, we address three more of the most common retirement plan myths that we hear. For our first installment, click here .
Part I: A Brief History of TPAs When discussing retirement plans and pensions, many people immediately think of public sector entities and large corporations and the financial institutions that support them, such as banks, brokers, and investment firms. These entities tend to appear as the visible “faces” of retirement savings: managing assets, issuing account statements, even airing commercials touting their investment expertise. But what many folks don’t realize is that there's another key player behind the scenes: an entity called a Third-Party Administrator, or TPA. In today’s post, we explore the history of the Third-Party Administrator, beginning with the rise of retirement plans in the U.S.