Congress drafts technical corrections for SECURE 2.0


Leadership of the House and Senate tax-writing committees has released a draft agreement on technical corrections for the retirement reform bill known as SECURE 2.0.


The so-called ‘four corners’ agreement (chairs and ranking members of each committee) released on Dec. 6 is not yet final, as committees have solicited feedback, but is noncontroversial and has a good chance of eventual enactment.


The draft bill follows a letter sent earlier this year by tax committee leaders to the IRS identifying four technical corrections and asking the IRS to take into consideration of congressional intent to fix several drafting errors when developing guidance related to the law. The draft legislation would address the four issues identified in the letter and several other issues.


The proposed fixes include items on:

  • Catch-up contributions: The legislation would fix an unintended error that could be read to deny any catch-up contributions in 2024. The IRS already issued guidance (Notice 2023-54) to allow catch-ups despite the error.
  • Matching starter 401k max contributions to IRA limits: The legislation would clarify that the additional $1,000 credit for employer contributions for small employer pension plans is in addition to the otherwise available $6,000 cap for a total cap of $7,000.
  • Required minimum distributions: The legislation would clarify that the age for required minimum distributions from tax-benefitted retirement plans was raised to 73 starting in 2023, and 75 starting in 2033, as intended. The original legislative language could erroneously be read to apply the increase to age 75 for individuals who turn 74 after 2032.
  • Escalation of automatic enrollment amounts: SECURE 2.0 set up a 15% statutory ceiling for automatic enrollment requirements for plans started since the law took effect. This technical corrections draft would push back the date of that ceiling taking effect by a year, from Jan. 1, 2025, to Jan. 1, 2026.
  • SIMPLE IRAs and SEPs: The technical correction legislation would also clarify that contributions to SIMPLE IRAs and SEPs do not count against annual Roth IRA limits.

The tentative agreement around noncontroversial technical corrections is likely to pass after a period of public input on the changes, with possible additional tweaks to come after those comments. The agreement also signals that lines of communication are open between committee staff, chairs and ranking members from both parties, a mildly positive sign for a potential deal around tax extenders. 



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