SECURE Act Changes to 401(k)/403(b) Safe Harbor Plans

The Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”) made several notable changes to the rules for safe harbor plans, that is, plans that are not subject to Actual Deferral Percentage (“ADP”)/Actual Contribution Percentage (“ACP”) nondiscrimination testing. First, it lifted the cap on automatic deferrals to 15 percent (up from 10 percent) for Qualified Automatic Contribution Arrangement (“QACA”) plans. Second, it eliminated the annual notice requirement for plans with safe harbor nonelective employer contributions. Third, it expanded the ability to retroactively adopt safe harbor plans.


In the Journal of Pension Benefits article, “SECURE Act Changes to 401(k)/403(b) Safe Harbor Plans,” Groom principal Elizabeth Thomas Dold breaks down the impact of the changes to safe harbor plans rules via the SECURE Act and answers top of mind questions about IRS Notice 2020-86.


Click here to read the article.

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