Update from ASC Actuaries

SECURE 2.0 From the Defined Benefit Perspective

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SECURE 2.0 was signed into law on December 29, 2022, as part of the Consolidated Appropriations Act, 2023. Setting Every Community Up for Retirement Enhancement (SECURE “1.0” to distinguish it from the latest legislation) was originally passed in 2019. In the years between the passage of the two laws, legislators have been very busy trying to improve the national retirement landscape for plan participants.

While the vast majority of the SECURE 2.0 provisions affect defined contribution plans, SECURE 2.0 included several provisions specific to defined benefit plans and some that affected both DC and DB plans. For example, the age at which participants must start taking the Required Minimum Distribution applies to both types of plans, as does the increase in the mandatory cash-out limits for lump sums.

The summary tables in the downloadable PDF are organized by SECURE 2.0 provisions affecting only DB plans (color coded in blue), those affecting both DB and DC plans (color coded in green), and a DC provision which may impact combo DB/DC plans (color coded in yellow). Each table includes the background, the change under SECURE 2.0, the effective date of the change, and the analysis or practitioner considerations including ASC programming impact.

With over 90 retirement plan related provisions included in SECURE 2.0, our summary is not meant to serve as an exhaustive list. In addition, guidance is needed for a number of the changes to help practitioners and plan participants navigate the requirements of SECURE 2.0.

ASC Resources

ASC has your back! Since the law’s passage, ASC has been actively reviewing the new legislation to determine the impact on our systems – DGEM Plan Documents, DC and DB valuation and compliance testing and administration systems, DGEM 5500, and our CRM products, PensionPal and CATTS.

Refer to https://www.asc-net.com/secure-act-2/ for future updates and alerts related to SECURE 2.0. The page currently has an ASC Alert released in December 2022 summarizing:

  • Key provisions for retirement plans
  • ASC’s approach for implementing needed modifications
  • ASC product-by-product summary of key provisions and the needed modifications to the product
  • A detailed table summarizing SECURE 2.0 provisions and their effective dates
Stay tuned for future announcements of programming changes during our webcasts and news alerts throughout the year.

Click on “Download PDF” to Read Full Update including Summary Tables

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Devin Schmelzer, Valerie M. Lopez, and Caroline Khachaturian