Our thoughts and prayers are with everyone affected by Hurricane Helene. During these challenging times, it’s essential to know that there is helpful relief available through the SECURE Act 2.0 of 2022.
The Act allows special distribution and loan rules from retirement plans for individuals impacted by qualified federally declared disasters. This provision enables employers to offer financial assistance to plan participants by allowing emergency withdrawals or loans without incurring the 10% early withdrawal penalty. To qualify, a participant’s principal residence must be located in the disaster area during the incident period, and they must have experienced an economic loss due to the disaster.
Published October 4, 2024
Margie Brown, Principal Consultant
This is an optional provision that employers may implement, with no formal plan amendment required until the deadlines below. Employers must coordinate with their document provider, recordkeeper, and/or TPA to ensure proper plan setup, participant communication, and compliance.
- 401(a) PS
- 401(k)
- Money Purchase (MP)
- 403(b)
- Governmental 457(b) plans
Amendment Deadlines:
- Non-governmental or non-collectively bargained qualified plans, and non-public school 403(b) plans: December 31, 2026
- Collectively bargained plans: December 31, 2028
- Governmental qualified plans and public school 403(b) plans: December 31, 2029
- Governmental 457(b) plans: The latter of December 31, 2029, or, if applicable, the first day of the first plan year beginning more than 180 days after the date of notification by the Treasury Secretary that the plan was administered in a manner that is inconsistent with the requirements of IRC Section 457(b)
Note: Terminating plans must be amended for any changes effective before termination.
For more information, refer to the IRS Fact Sheet FS 2024-19 and the FEMA website for a list of declared disasters and incident periods.
Enterprise Iron is here to help your firm with Plan Restatements, Amendments, Nondiscrimination Testing, 5500 and Reporting, Communication Materials, and more. Let our Retirement Plan Compliance Services (RPCS) Team streamline your processes, maximizing efficiency, and cost savings with tailored solutions. Contact us at compliance@enterpriseiron.com today to get started!
The materials contained herein is general and prepared for informational purposes only and shall not be construed as constituting legal or tax advice. Tax laws and regulations are complex, and some content is subject to interpretation of the law and subject to change as further regulatory guidance is published. Please consult your own independent attorney or tax professional regarding your specific situation.