The SECURE Act also creates big changes for companies offering qualified retirement plans. Here are a few of them:
More small businesses are eligible to start a qualified retirement plan for employees, as the new law allows two or more unrelated employers to join a pooled employer plan. More parttime workers are eligible to make elective deferrals, depending on their length of tenure, and plan sponsors have a new safe harbor when offering annuities.
Employers will also see higher tax credits for plan startup costs and up to a $500 credit for startup plans that include automatic enrollment in 401(k) plans and SIMPLE IRAs. The safe harbor for the automatic enrollment escalation cap rises from 10% to 15% of pay, while certain penalties for failing to file plan returns increase.
Talk to your tax and plan professionals to learn more.