In a bid to broaden access to retirement savings programs for a greater number of Americans, both the SECURE Act and SECURE 2.0 have implemented new regulations. These rules mandate that plans must permit long-term part-time (LTPT) employees to make elective deferrals into a 401(k) plan, provided they meet specific minimum hours requirements. This is acccording to a recent report by Bricker & Graydon LLP.
An update on a prior post on the subject, the current update aims to serve as a reminder, given the fast-approaching effective date. The update also discusses the expansion of the LTPT rule in SECURE 2.0. For corporate law professionals and industry stakeholders, it is of utmost urgency to be aware of these oncoming changes to retirement savings programs, especially as it pertains to part-time employees who meet the set conditions.
As such, it is crucial for employers to ensure they have been counting the hours worked by their LTPT employees accurately. This is to ensure that these employees are granted the ability to make elective deferrals into their 401(k) plans, should they meet the stipulated minimum hours requirements. A failure to adhere to these new regulations could lead to legal ramifications for businesses.
As we move towards the implementation of these new measures, all businesses should examine their current practices to ensure they are compliant with the requirements set forth in the SECURE Act and SECURE 2.0.