4th Quarter Compliance Reminders

New SECURE Act 2.0 | Long-term part-time employees

Starting in the 2025 plan year, the SECURE Act 2.0 lets part-time employees who've worked at least 500 hours for two consecutive years join the company's 401(k) plan. Here's a quick guide for employers:

• January 1, 2025: Part-time employees who work 500 hours/year for 2 consecutive years are eligible to participate in the company’s 401(k) plan. 
• Check your records: Look at your employee data to see who'll be eligible.
• Talk to them: Once you know who's eligible, tell them about their new 401(k) options.

Doing this early helps get your part-time employees smoothly onboard with their new benefits.

Q4 Compliance Highlights* 

October 15

• If on extension, filing deadline for the Form 5500
• If on extension, filing deadline for individual and/or corporate tax returns and final contribution deadline for deductibility
• Adopting a retroactive amendment to correct minimum coverage or nondiscrimination requirements (IRC Sections 410(b) & 401(a)(4))

December 1

• Sending annual 401(k) and safe harbor match notice*
• Sending annual Qualified Default Investment Alternative (QDIA) notice*
• Sending annual automatic contribution arrangement notice (ACA)*
• It's important to send these notices at least 30 days (and not more than 90 days) before the beginning of each plan year.

December 15

• If on extension, deadline for distributing SAR to participants*

December 31

• Processing corrective distributions for failed ADP/ACP test to avoid the 10% excise tax
• Correcting a failed ADP/ACP test with qualified nonelective contributions (QNECs)
• Converting existing 401(k) plan to safe harbor non-elective design for current plan year
• Amendment to remove or convert to safe harbor status for next plan year
• Amending plan for discretionary changes implemented during plan year (certain exceptions apply)
• RMDs due under IRC Section 401(a)(9) to avoid penalties