WASHINGTON – January 26, 2024 – The ERISA Industry Committee (ERIC) sent a letter today asking the Internal Revenue Service (IRS) for transition relief related to a proposed regulation expanding retirement plan coverage to certain part-time employees.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 and the SECURE 2.0 Act of 2022 (SECURE 2.0) limited the ability of retirement plan sponsors to exclude certain “long-term part-time employees” from making their own salary deferral contributions. The proposed rule implementing these changes, “Long-Term, Part-Time Employee Rules for Cash or Deferred Arrangements Under Section 401(k),” would be effective for plan years that began January 1, 2024.
“While we appreciate the ability to rely on these proposed rules, plan sponsors should have a ‘good faith compliance’ standard with respect to plan years that began January 1, 2024,” said Andy Banducci, ERIC Senior Vice President, Retirement and Compensation. “This transition relief would give plan sponsors certainty and ensure that these rules can be implemented appropriately going forward.”
The full text of ERIC’s response to IRS is here.
