By SEMA Washington, D.C., Staff
President Trump recently signed into law a bipartisan bill to fund federal government agencies for fiscal year 2020, which included the “Setting Every Community Up for Retirement Enhancement Act” (SECURE Act), which expands retirement savings programs. The new law represents the most comprehensive change to U.S. retirement policy in more than a decade, as it simplifies the process for small businesses to join multiple employer plans by not requiring businesses to be affiliated, increases tax credits for small businesses adopting a retirement plan, permits part-time employees to enroll in 401(k) plans, increases the age when individuals must start withdrawing money from an IRA from 70½ to 72, repeals the age cap on contributing to an IRA (currently 70½) and protects employers offering annuities from liability if the insurance company administering the plan is not able to make payments.
While many of the SECURE Act provisions are favorable for small businesses and workers, the new law eliminates stretch IRAs, which are an estate planning tool that has allowed individuals to pass their retirement funds to their children, grandchildren or other beneficiaries. The law now limits the amount of time individuals inheriting a retirement account have to fully withdraw funds from the account to 10 years, although there is an exemption for surviving spouses, the disabled and chronically ill, and children under the age of 10. SEMA and other businesses groups also objected to a SECURE Act provision that increased penalties charged to businesses that fail to file retirement plan returns, which will largely impact small businesses.
| Webinar—What You Need to Know About the SECURE Act Tuesday, January 28, 12:30 p.m.–1:30 p.m. (EST) |
Register for the free webinar now! Instructions: Identify “SEMA” as the Association that invited you. After registering, you will receive a confirmation email containing information about joining the webinar. |
If you would like to learn more about the new law’s significant changes to retirement savings programs, the Small Business Legislative Council will host a webinar January 28, at 12:30 p.m. (EST). The webinar will include a special emphasis on the elimination of the stretch IRA, changes you may need to make in your estate planning documents and ways to reduce the loss in the value of retirement benefits you plan to leave to your children. SEMA is a long-standing SBLC member, so the webinar is free of charge for SEMA-member companies.
For more information, contact Eric Snyder at erics@sema.org.