August 2023

Secure 2.0 Change (part 1)

On December 29, 2022, the SECURE 2.0 Act was signed into law as part of the Consolidated Appropriations Act (CAA) of 2023. SECURE 2.0 made sweeping changes to retirement plan provisions for years to come and contains over 90 provisions. This Act is a meaningful step to improve retirement outcomes.

Highlights of these changes that become effective for plan years beginning after December 31, 2022, include:

• Participants may choose to receive employer contributions on a Roth basis. Optional for plan sponsors.

• Required Minimum Distribution (RMD) age increased from 72 to 73 effective January 1, 2023. Also, penalties for not taking an RMD have been reduced. Required.

• Employees can self-certify hardship withdrawal requests. Optional for plan sponsors.

• Additional rules provided for the use of retirement funds with federally declared disasters. Optional for plan sponsors.

• Certain plan notices are waived for unenrolled participants. Optional for plan sponsors.

• Removed 'first day of the month' requirement for certain 457(b) plans. Required.

As with any new Act, there is still a need for detailed guidance in implementing these new provisions. While some provisions are effective now or in the near future, it may take time for investment platforms and recordkeeping systems to update processes, procedures, and/or software to accommodate some of the changes.

BPI will continue to closely monitor the impact of the SECURE 2.0 Act and work with plan sponsors and financial institutions to help participants achieve their retirement goals. We appreciate your patience during this process and will update you as more guidance is released. In the meantime, your plan should operate in good faith compliance with the SECURE 2.0 changes. An amendment to your plan will be required by the last day of the first plan year beginning on or before January 1, 2025. We will provide you with the amendment once it becomes available.

Please see the attachment with additional details regarding these highlighted changes.

If you have any questions about any of the items mentioned in this email, please contact your Administrator. As always, we appreciate the opportunity to service your retirement plan.

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