The retirement plan industry is experiencing significant changes due to new regulatory requirements, pressing fee margins, and rising participant expectations. With the recent introduction of the SECURE Act 2.0 of 2022, plan administrators and recordkeepers are now faced with addressing these changes and ensuring compliance.

This article will explore the impact of the SECURE Act 2.0 on retirement plan administration service providers and recordkeepers. We will also discuss upgrading your system to an AI-powered comprehensive platform for navigating the evolving regulatory landscape.

Decoding the impact of SECURE Act 2.0 on retirement plan administrators and recordkeepers

The SECURE Act 2.0 brings about numerous changes that directly impact plan administrators and recordkeepers. Some of the key changes include:

  • New plans and tax incentives: The Act provides tax incentives for small businesses, generating more interest in 401(k)plans.
  • Auto-enrollment: New requirements mandate that participants are auto-enrolled with a minimum investment of 3%, which increases by 1% per year up to 10%. It will likely result in more participants enrolling in employer retirement savings plans.
  • Catch-up contributions: The Act significantly increases catch-up allowances for eligible participants.
  • Student loan reimbursement: Businesses can easily offer student loan reimbursement matching under the SECURE Act 2.0.
  • Required Minimum Distribution (RMD) changes: The RMD age will increase from 72 to 75 by 2033.
  • 403(b) changes: The Act has initiated the inclusion of Collective Investment Trusts (CITs) in 403(b) plans, pending further legislative and regulatory efforts.
  • 529 to Roth IRA conversions: The new provisions allow for a one-time, penalty-free transfer from 529 account holders to a Roth IRA.

Making the shift: why embracing technology is essential

With the evolving regulatory environment posed by SECURE Act 2.0, relying on traditional recordkeeping methods and systems exposes retirement plan administrators and recordkeepers to numerous challenges and risks. Adopting an AI-powered comprehensive platform is the key to responding to the changes successfully.

●     Adapt to SECURE Act 2.0 regulations

Legacy systems may be unable to handle the increasing recordkeeping complications and regulatory needs. By utilizing an advanced platform like CORE 2.0 by Congruent Solutions, plan administrators and recordkeepers can quickly adapt to new regulatory requirements under the SECURE Act 2.0. In addition, it streamlines the processes necessary for compliance, enabling you to implement new account types and catch up on contribution limits swiftly.

●     Enhance efficiency and reduce risk

The rising workload and compliance complications require an efficient recordkeeping and plan administration solution. A comprehensive retirement plan administration solution offers greater efficiency by automating routine tasks. In addition, it reduces the risk of non-compliant actions and penalties resulting from human error.

●     Improve client communication and support

As retirement plan offerings become more complex with the SECURE Act 2.0, clients will naturally have more questions and require more support. An AI-powered platform can provide real-time assistance and guidance to plan administrators and recordkeepers. In addition, it streamlines communications and ensures client satisfaction.

The future of retirement plan management: leveraging CORE 2.0

Preparing for the SECURE Act 2.0 era means investing in the right tools for recordkeeping and plan administration. CORE 2.0 by Congruent Solutions is a comprehensive retirement plan administration solution. It is a cloud-based microservices platform providing a centralized information hub and real-time access to participant data.

CORE 2.0 is designed to handle the increasing complexities of the regulatory environment with features such as automatic enrollment, auto-escalation, and catch-up contributions. It simplifies the management of retirement plan assets and enables you to adapt your services according to changes in regulations quickly.

Contact us now to understand how CORE 2.0 will help you plan for the future.

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