In an effort to clarify the application of the SECURE 1.0 and SECURE 2.0 Acts, the IRS released a Notice of Proposed Rulemaking on November 24, 2023. These proposals specifically address the application of rules pertaining to “long-term, part-time employees.” As these rules have been long-awaited and highly anticipated, their release marks significant progress in the legal landscape for corporate professionals.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 sought to ensure that more people have access to retirement plans. Consequently, long-term part-time employees became eligible to participate in a company’s 401(k) plan under certain conditions. The subsequent SECURE 2.0 Act of 2022 heightened the promise of increased access to retirement benefits further. The IRS proposal aims to iron out the specifics around these long-term part-time employee provisions in both acts.
The proposed regulations dive into several aspects. They delve into defining a long-term part-time employee, rules regarding years of service, and entry dates for participation, among other topics. Although they provide a clarification on many points, the proposed regulations have also sparked a number of critical questions that need answers.
The legal community, particularly those working with large corporations, should closely monitor developments in this area. It is evident that these new rules and regulations could influence a broader change in the way corporations handle part-time, long-term employees and the benefits they could potentially receive.
The full details of the Notice of Proposed Rulemaking by the IRS are provided by Groom Law Group, Chartered. The text of the source article was not available as of the time of writing.