Archambo Financial Advisors, Inc.

 

Aaron S. Archambo, CFP®

 

Debbie E. Mueggenborg, CPA

 

Jonathan S. Russell

 

Phone:  918-336-2222

September/October 2020

SECURE Act for Small Business

SECURE Act for Small Business

When 2020 began, business owners found significant changes in the way they may run their qualified retirement plans, thanks to the Setting Every Community Up for Retirement Enhancement (SECURE) Act. Whether or not you sponsor a plan, here is some of what you may want to know about the new law:


MEPs Expanded
Small employers who previously were ineligible to join multi-employer plans (MEPs) may now do so if they meet some relaxed requirements. Previously, participation in these multi-employer pools meant your company needed to share some common traits with others in the pool. This is no longer required, opening access to pools that might cost less for small businesses than stand-alone plans. Compliance was also relaxed for MEP providers.


New Income Options
The SECURE Act improves the safe harbor provision of plan providers who offer annuities in their qualified plans. The safe harbor makes it easier to satisfy fiduciary requirements when choosing the life insurance company selling the annuity.


Employers, however, are now required to file an annual disclosure notifying employees of their projected retirement income, calculated as if the plan balance were invested in an annuity. Additionally, part-time employees who worked at least 500 hours each year for three straight years are newly eligible to contribute.


Tax Credits
If your company doesn’t sponsor a qualified plan yet, the new law offers a bigger startup tax credit of up to $5,000 for establishing one, subject to rules and restrictions. You also have until your tax filing deadline, plus extensions, to start a plan. That’s moved from December 31.


And if you already sponsor a 401(k), SIMPLE IRA or other qualified plan, you may be eligible to take a $500 credit a year for three years of auto-enrolling new employees. Another new safe harbor involves the automatic enrollment escalation cap, which rises from 10% to 15% of pay— a boon for late savers.


Finally, the SECURE Act reduces some of the red tape and compliance issues that prevented small businesses from adopting qualified retirement plans in the past. So, if you don’t yet offer a retirement plan, you might want to examine one in light of these changes.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

Securities offered through Calton & Associates, Inc. Member FINRA and SIPC. Investment Advisory Services offered through Archambo Financial Advisors, Inc., a Registered Investment Advisor. Archambo Financial Advisors, Inc. is not owned or controlled by Calton & Associates, Inc.
Archambo Financial Advisors, Inc and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.