Key Components of the Recently Enacted
Setting Every Community Up for Retirement Enhancement (SECURE) Act

Below are the key components of the recently enacted Setting Every Community Up for Retirement Enhancement (SECURE) Act:

• Ability to make changes to safe-harbor retirement plans after the beginning of the plan year
• Increases the tax credit for eligible small employers who implement a qualified retirement plan (up to $5,000 from a previous $500); can be claimed for three (3) years
• New tax credit for new plan (or existing ones) that include an automatic enrollment feature (up to $500; in addition to the credit above); can be claimed for three (3) years
• Allows participants to make direct trustee-to-trustee transfers from qualified defined contribution plans, 403(b) plans, or governmental 457(b) plans to another employer-sponsored plan or IRA to preserve lifetime income investment option and avoid surrender charges and fees
• Employers that maintain 401(k) plans will be required to allow long-term part-time workers to participate if they work three consecutive years with at least 500 hours of service
• Repeals the maximum age for being able to make traditional IRA contributions
• Adds a provision for penalty-free withdrawals from a qualified retirement plan for any qualifying birth or adoption. Increases the age for when required minimum distributions (RMD) must begin, from age 70½ to age 72 (no more “half birthday” issues)
• Plans adopted by the filing due date for a given tax year (including extensions) will be treated as having been in effect at the end of that tax year
• Expands 529 education savings accounts to cover costs associated with registered apprenticeships; homeschooling; up to $10,000 of qualified student loan repayments (including those of siblings) and private elementary, secondary or religious schools
• Increases the failure to file penalty to the lesser of $400 or 100% of the amount of tax due
• Increases the penalty for failure to file retirement plan returns (Form 5500) to $105 per day, not to exceed $50,000. Other penalty increases will apply for failure to file a registration statement, for failure to file a required notification of change and the failure to provide a required withholding notice
• RMD rules will be modified for qualified plan and IRA balances upon the death of an account owner. Spousal beneficiaries will not be changed from prior treatment, but most non-spousal beneficiaries will be required to take complete withdrawal of the account balance by the end of the tenth (10th) calendar year following the year of the owner’s death.