Wednesday, January 20, 2021
IRS Notice 2020-86 addresses in the form of questions and answers certain provisions of the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”) affecting safe harbor retirement plans for plan years beginning after December 31, 2019.
The SECURE Act generally increases from 10% to 15% the maximum automatic deferral under a qualified automatic enrollment safe harbor plan (“QACA”). It also eliminates certain safe harbor notice requirements for traditional safe harbor plans that provide safe harbor nonelective contributions and adds new provisions for the retroactive adoption of safe harbor status for those plans.
Automatic Enrollment Cap Percentage Increase
The SECURE Act provides a plan sponsor with the option to increase from 10% to 15% of eligible compensation as the maximum deferral contribution for a QACA safe harbor plan.