December 15, 2020

2020 – 12/10

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) increased the maximum amount of an employee’s compensation, from a 10% cap to a 15% cap, which can be automatically deferred to an employer’s 401(k) plan after the employee’s first plan year. In Notice 2020-86, the IRS has provided additional guidance in the form of Q&As with respect to the increased cap. In addition, the Q&As cover the elimination of certain notice requirements for plans that provide for safe harbor non-elective contributions and the retroactive adoption of safe harbor status for those plans.