Pennsylvania Covid-19 Working Capital Access Program
On Wednesday, March 25th, Governor Wolf announced the COVID-19 Working Capital Access (CWCA) Program, a new program under the Pennsylvania Industrial Development ...
The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) includes provisions that grant nondiscrimination testing relief for certain frozen defined benefit (DB) pension plans.
Under current law, all retirement plans are required to pass nondiscrimination tests to maintain their tax qualification status. However, in cases involving closed or “frozen” DB plans where no new entrants are accepted, it can become difficult to pass such testing due to long-term participants becoming older and earning higher wages.
Section 205 of the SECURE Act creates a safe harbor, deeming frozen DB plans as automatically passing benefits, rights and features testing and the minimum participation rule as long as the plan passed the test in the year it was frozen and the two succeeding years. The SECURE Act also allows closed DB plans to be tested with a DC plan that includes a match or ESOP feature.
These modifications will protect the benefits of older participants as they near retirement by allowing them to continue to accrue benefits. The provision became effective December 20, 2019; affected plans may be amended at any time to incorporate the new safe harbor testing relief.
Interested in learning more about the SECURE Act? Download the SECURE Act eBook from the Schneider Downs Retirement Solutions team for a full overview of provisions and highlights at www.schneiderdowns.com/secure-act-ebook.
Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.
This article was updated on March 24, 2020. Updates to this article will be made as new information becomes available. Schneider Downs continues to track ...
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