2023: Quarter 1 Newsletter
SECURE 2.0 Act Key Changes
On December 29, 2022, the SECURE 2.0 Act of 2022 was signed into law. This law was designed to enhance retirement savings options and includes many significant changes to the Internal Revenue Code (IRC) provisions that govern 403(b) and 457(b) plans.
Did you know?
A retirement plan needs regular attention to operate properly. This includes reviewing your Plans' documents and basic operations.
Read this checklist for tips on how to find, fix and avoid potential errors during your review process. This is a great resource to have all year round!
The checklist isn't meant to be a detailed, comprehensive review of your Plan. It's an easy way to get started.
Plan Documents
403(b) and 457(b) Plan documents consist of all the initial documents that make up your written Plan. These documents describe the available features of the Plan, eligibility, and other operational rules. It must maintain compliance with Internal Revenue Code Section 403(b) and/or Code Section 457(b), and any other applicable guidelines or regulations.
When your Plan and our administrative services were established, you received copies of your 403(b) and/or 457(b) Plan documents. These documents include, but are not limited to:
- AFPlanServ Volume Submitter Plan Document
- AFPlanServ Investment Provider Agreement
- Eligibility Notice
Monitoring of Plan Limits
AFPlanServ helps you monitor employee contributions to avoid exceeding annual limits. If a participant has contributed more than the IRS annual limit, we will notify you, the participant, and the Provider that received the contributions to ensure the excess is corrected in a timely manner.
As a reminder, you're responsible for ensuring that a salary reduction agreement is completed by each employee who elects to participate and contribute to your Plan. This helps keep your Plan compliant and reduces the risk of excess contributions.
We'll review and approve all salary reduction agreements and return copies to you for recordkeeping. It's best practice to keep all approved copies on file for each participant currently contributing to your Plan. This provides evidence of proper plan operation during IRS audit.
Frequently Asked Questions
Q: Can a participant start, stop or change their deduction without a Salary Reduction Agreement (SRA)?
A: No. An employer may not process a contribution change without a properly executed, signed, and approved salary reduction agreement from the participant.
Q: What's the best way to obtain copies of Plan documents?
A: You may obtain copies of the Plan documents by contacting AFPlanServ. A binder or an electronic file will be sent to you.
Plan Reminders
Each year, AFPlanServ provides a Sample Eligibility Notice to help satisfy the universal availability requirements. You may use it as a template for your custom notification or distribute the sample in its entirety.
Please check the Operational Guidelines to ensure you adhere to the items listed. If you have any questions, please contact us.
To update the contact information for your Plan, please complete the Employer Contact Form.
If you need more information about your role as the Plan Sponsor, we're happy to help!