President Trump recently signed an Executive Order (“Order”) that could make several changes to retirement plans with the hope of making retirement plans more accessible to even more Americans. The Order directed the Department of Labor (“DOL”) and the Treasury to look at the following items:
Multiple Employer Plans (MEPs): The President has asked the DOL and Treasury to make changes to the existing rules in order to make it easier for businesses to join together to offer MEPs. The ability to join a MEP and thereby reducing the cost of offering a retirement plan is hoped to increase the number of small employers offering a retirement plan. In addition to looking at expanded who can join a MEP, the Order also asks that the rules regarding maintaining tax qualified status be reviewed, including maintained qualified status even if one of the participating employers fails to satisfy the qualification requirements.
Notice requirements: In an effort to reduce the administrative burden of a retirement plan, the President’s Order directed the DOL and Treasury to consider ways to reduce the burden of the various notice requirements. The Order requests that the complexity and number of notices be reviewed, as well as a broader ability for notices to be delivered electronically.
Minimum required distributions: The President also aimed to help address the concern that participants will outlive their retirement savings by asking that the mortality tables used in to calculate minimum required distributions be reviewed and updated. With Americans living longer, the ability to reduce the amount that is required to be distributed each year from the plan will help participants keep more money in their retirement plans for a longer period.
Nyhart will continue to monitor the progress of the items outlined in the Executive Order and update accordingly. Please contact your account representative at Nyhart for more information or if you have any questions.