Updated IRS regulatory agenda includes SECURE 1.0 and 2.0 items 

July 19, 2024

The spring 2024 update to IRS’s regulatory agenda includes several new retirement items related to the Setting Every Community Up for Retirement Enhancement (SECURE 1.0) Act of 2019 (Div. O of Pub. L. No. 116-94) and the SECURE 2.0 Act of 2022 (Div. T of Pub. L. No. 117-328). Most older items didn’t change significantly, but the agency moved several projects from the active agenda to its long-term agenda and vice versa. The Department of Labor (DOL) and Pension Benefit Guaranty Corp. (PBGC) also updated their agendas, but neither agency made significant changes to their current lists of retirement projects. While the active agenda often specifies anticipated completion dates within the next year, those dates are generally aspirational and routinely change as an agency’s priorities shift.

Many of the new and updated items on IRS’s agenda relate to statutory changes made by SECURE 1.0 and 2.0. Several of these changes have taken effect or will take effect soon. In some cases, IRS has already published informal guidance such as notices and FAQs to help sponsors implement these provisions while awaiting regulations.

Catch-up contributions. IRS intends to issue proposed rules by October on two SECURE 2.0 provisions modifying the rules for catch-up contributions. Starting next year, higher catch-up limits apply to employees ages 60 to 63. Then in 2026, catch-up contributions under 401(k), 403(b) and governmental 457(b) plans may only be made on a Roth basis by participants whose prior-year FICA wages with the sponsor exceeded $145,000 (indexed). Other participants must also have the option to make Roth catch-up contributions if any participant is limited to Roth catch-ups. (The Roth catch-up mandate was originally slated to take effect in 2024 before the agency delayed enforcement for two years.)

Mandated auto-enrollment for new plans. The agenda includes a proposal on SECURE 2.0’s requirement that many 401(k) and 403(b) plans established on or after Dec. 29, 2022, include an automatic contribution arrangement feature for plan years starting in 2025 or later.

Long-term, part-time (LTPT) employees. IRS hopes to finalize its November 2023 proposal on 401(k) plan eligibility requirements for LTPT employees, reflecting comments received on the proposal and feedback from a public hearing in March. The SECURE 1.0 changes allowing employees to participate after three years of working 500 or more hours took effect for 2024 plan years, while the SECURE 2.0 changes lowering the three-year requirement to two years take effect for plan years starting in 2025. The agenda doesn’t indicate whether these regulations will also cover the application of SECURE 2.0’s LTPT rules to 403(b) plans.

401(k) plans rules. IRS intends to issue proposed rules addressing many of SECURE 1.0’s outstanding law changes relating to 401(k) plans, including items such as the modifications for qualified automatic contribution arrangements (QACAs), elimination of safe harbor notices for plans satisfying the actual deferral percentage (ADP) test with nonelective contributions, nondiscrimination rules for retirement plans covering closed groups of employees and defined contribution plan lifetime income portability. For the spring update, IRS retrieved this item from the inactive agenda, giving it a December target date.

Unified plan rule for MEPs. IRS expects to release a final regulation on the “one bad apple” rule for multiple employer plans (MEPs), including pooled employer plans (PEPs), this month. The agency’s agenda also contains a new proposal giving guidance on what it means for participating employers in a MEP (other than a PEP) to have a “common interest” beyond having adopted the plan.

IRS’s agenda also includes the final and proposed Section 401(a)(9) regulations on required minimum distributions. IRS published those rules on July 19. However, the agenda doesn’t include any regulatory projects on SECURE 2.0’s new student loan match, which may suggest that any forthcoming implementation guidance will be subregulatory, such as a notice or FAQs.

IRS has 16 other retirement projects on its active agenda, but only two are newly added or significantly advanced from the previous agenda:

• A proposed rule on minimum vesting standards for qualified plans, a longstanding agenda item the agency moved from the long-term agenda (although the target date is not until June 2025)
• A new final rule on COVID-19 adjustments to substitute mortality tables for defined benefit (DB) plans’ actuarial valuations for plan years starting in 2025 or later

For most of the other items, the only change (if any) was an extension of the projected completion date. Some of the notable continuing entries include a proposed rule on nondiscrimination testing relief for closed DB plans and a proposal on benefit restrictions for DB plans under Internal Revenue Code Section 436.

IRS’s long-term agenda includes items the agency has placed on the back burner. Due to shifting priorities, items may move on and off this list over time. The 2024 long-term agenda includes three previously published retirement items removed from the active agenda since fall 2023:

• A proposed rule on the definition of a church plan
• Statutory hybrid plan (for example, cash balance plan) proposed regulations on specific issues facing these plans related to nondiscrimination, benefit accrual, plan termination and top-heavy rules.
• Final regulations on the allocation or use of forfeitures in 401(k) plans

DOL’s active agenda includes about a dozen ongoing retirement items. The agency continues to evaluate public feedback on a slew of SECURE 2.0 provisions, including:

• Pension-linked emergency savings accounts (PLESAs)
• Plan sponsor reporting requirements for the new Retirement Savings Lost and Found database
• Reporting and disclosure changes

Other projects include a restatement of the Voluntary Fiduciary Correction Program and proposed Form 5500 improvements. DOL’s long-term agenda includes a single retirement item on finalizing the 2020 interim final rule on lifetime income disclosures for participants in defined contribution plans. 

PBGC’s active agenda includes several longstanding items — such as the final rule on assumptions used to measure withdrawal liability for multiemployer plans — and a new SECURE 2.0 project on participant disclosures to help the DOL, PBGC and IRS prepare their required report to Congress by Dec. 29, 2025. (A triagency request for information on this project was issued in February with a comment deadline of April 22.) PBGC’s long-term agenda is empty.

• Div. T of Pub. L. No. 117-328, the SECURE 2.0 Act of 2022 (Congress, Dec. 29, 2022)
• Div. O of Pub. L. No. 116-94, the Setting Every Community Up for Retirement Enhancement Act of 2019 (Congress, Dec. 22, 2019)
• IRS regulatory agenda (Office of Management and Budget, July 9, 2024)
• DOL regulatory agenda (Office of Management and Budget, July 9, 2024)
• PBGC regulatory agenda (Office of Management and Budget, July 9, 2024)

• User's guide to SECURE 2.0 (regularly updated)
• DOL seeks information for SECURE 2.0 lost-and-found database (April 30, 2024)
• IRS fine-tunes auto-enrollment exemption, explains new correction (April 15, 2024)
• DOL, IRS issue guidance on DC plan emergency savings accounts (March 8, 2024)
• Agencies launch SECURE 2.0 reporting and disclosure review (Feb. 14, 2024)
• IRS proposes long-term, part-time worker 401(k) eligibility rules (Jan. 29, 2024)
• DOL starts tackling SECURE 2.0 reporting and disclosure updates (Sept. 19, 2023)
• IRS delays SECURE 2.0’s Roth catch-up mandate until 2026 (Aug. 29, 2023)
• DC plans need guidance on SECURE 2.0’s higher catch-up limit (May 1, 2023)