New Legislative & Regulatory Changes Affect Retirement Planning

SECURE Act, CARES Act & IRS COVID-19 responses impact many taxpayers

Many legislative and regulatory changes enacted in the past several months directly impact qualified retirement plans and are most helpful to many taxpayers but not all.


Several of them require qualified plan administrators and plan participants to take them into account to ensure maximum benefit is realized at retirement. Taxpayers should consult with their retirement planning advisor about the changes to required minimum distributions, possible beneficiary designation changes, using annuities in a retirement plan, meeting current financial needs with retirement plan assets, and many other planning issues resulting from these legislative & regulatory actions.

Relief measures, changes require taxpayer awareness

In December 2019, the SECURE Act (Setting Every Community Up for Retirement Enhancement Act) put in place a series of reforms for qualified retirement plans. This March, the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) also included several relief measures relating to retirement plans in response to the COVID-19 pandemic. And, the Internal Revenue Service (IRS) has also taken several steps this year to provide additional relief, which has affected retirement plans. Below are some of the changes that taxpayers should consider when it comes to retirement planning.

SECURE Act Changes

  • Required minimum distribution age postponed from age 70 ½ to age 72
  • More rapid distribution of 401(k) and IRA accounts on participant’s death
  • Part-time employees eligible to participate in 401(k) plans
  • Qualified Automatic Contribution Arrangement maximum percentage increased from 10 percent to 15 percent
  • Pension plans may permit certain in-service distributions starting at age 59 ½
  • Greater ability for qualified retirement plans to offer annuities
  • Penalty-free distributions for births and adoptions
  • New 401(k) nonelective contribution safe harbors

CARES Act Changes

  • Penalty-free distributions up to $100,000
  • Plan loan limits increased to $100,000 and 100 percent
  • No required minimum distributions for 2020
  • Pension plan funding relief

IRS Changes

  • Many qualified plan filing deadlines extended to July 15, 2020
  • Several pre-approved defined benefit plan deadlines extended to July 31, 2020
  • Due dates for IRA Form 5498 and HSA Form 5498-SA extended to August 31, 2020
  • 403(b) plan amendment deadlines extended to June 30, 2020
  • Waiver of requirement for the physical presence of notary for spousal consent to distributions

Employer Changes

  • Employee layoffs may result in a partial termination of qualified retirement plans
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