On December 17, 2019, Congress passed the long awaited SECURE ACT (Setting Every Community Up for Retirement Enhancement Act of 2019).
Some of the key points:
- The required beginning date to take RMDs is increased to 72
- Allowing retirement plans to be effective for current year when amended
- Reducing the "stretch" to 10 years for most beneficiaries
For ease of understanding the Act (located in Section O of the 2019 spending bill), here is the relevant table of contents.
TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS
Sec. 101. Multiple employer plans; pooled employer plans.
Sec. 102. Increase in 10 percent cap for automatic enrollment safe harbor after
1st plan year.
Sec. 103. Rules relating to election of safe harbor 401(k) status.
Sec. 104. Increase in credit limitation for small employer pension plan startup
Sec. 105. Small employer automatic enrollment credit.
Sec. 106. Certain taxable non-tuition fellowship and stipend payments treated
as compensation for IRA purposes.
Sec. 107. Repeal of maximum age for traditional IRA contributions.
Sec. 108. Qualified employer plans prohibited from making loans through credit
cards and other similar arrangements.
Sec. 109. Portability of lifetime income options.
Sec. 110. Treatment of custodial accounts on termination of section 403(b)
Sec. 111. Clarification of retirement income account rules relating to church controlled organizations.
Sec. 112. Qualified cash or deferred arrangements must allow long-term employees working more than 500 but less than 1,000 hours per year to participate.
Sec. 113. Penalty-free withdrawals from retirement plans for individuals in case
of birth of child or adoption.
Sec. 114. Increase in age for required beginning date for mandatory distributions.
Sec. 115. Special rules for minimum funding standards for community newspaper plans.
Sec. 116. Treating excluded difficulty of care payments as compensation for determining retirement contribution limitations.
TITLE II—ADMINISTRATIVE IMPROVEMENTS
Sec. 201. Plan adopted by filing due date for year may be treated as in effect
as of close of year.
Sec. 202. Combined annual report for group of plans.
Sec. 203. Disclosure regarding lifetime income.
Sec. 204. Fiduciary safe harbor for selection of lifetime income provider.
Sec. 205. Modification of nondiscrimination rules to protect older, longer service participants.
Sec. 206. Modification of PBGC premiums for CSEC plans.
TITLE III—OTHER BENEFITS
Sec. 301. Benefits provided to volunteer firefighters and emergency medical responders.
Sec. 302. Expansion of section 529 plans.
TITLE IV—REVENUE PROVISIONS
Sec. 401. Modification of required distribution rules for designated beneficiaries.
Sec. 402. Increase in penalty for failure to file.
Sec. 403. Increased penalties for failure to file retirement plan returns.
Sec. 404. Increase information sharing to administer excise taxes.
TITLE V—TAX RELIEF FOR CERTAIN CHILDREN
Sec. 501. Modification of rules relating to the taxation of unearned income of
TITLE VI—ADMINISTRATIVE PROVISIONS
Sec. 601. Provisions relating to plan amendments.