While the Department of Labor’s Employee Benefits Security Administration issues proposed and final regulations related to the SECURE 2.0 Act of 2022, plan sponsors should undertake a general review of their workplace benefits, using the agency’s Cybersecurity Program Best Practices as guidance, advises assistant Secretary of Labor Lisa Gomez, in speaking with PLANSPONSOR.

Gomez advises plan sponsors to stay focused on ongoing compliance issues, while waiting for new guidance.

“It’s a good opportunity to look at [the DOL’s 2021] cybersecurity [guidance] and again, be reviewing our best practice standards that we put out to see whether or not things have changed internally, [and you] have you covered all the bases,” Gomez says. Plan sponsors must be “making sure the house is in order from a cybersecurity standpoint.”

What Plan Sponsors Can Expect Regarding SECURE 2.0

The 2022 law contained “priority projects that folks can expect to see in the first quarter of 2024,” including a final proposed rule on auto-portability, Gomez says.

As of January 1, 2024, an employer is permitted to distribute a terminating participant’s account balance without participant consent if that balance is less than $7,000 and is immediately distributable under the rule.

According to Gomez, the DOL plans to soon submit proposed guidance to the White House Office of Management and Budget for review. The guidance relates to implementing provisions of SECURE 2.0 that provide an exemption whereby a plan participant’s retirement assets can be automatically rolled over when that person changes jobs.   

“We are working on a notice of proposed rulemaking, and that should be coming out very quickly,” Gomez says.

The assistant secretary notes that twice a year the DOL posts its regulatory agenda to the website of the Executive Office of the President, Office of Information and Regulatory Affairs.  

“We have been very active at EBSA, in issuing both proposed and final regulations,” she says. “It’s not an exact science,” Gomez says.

SECURE 2.0 also required the DOL to issue guidance on retirement plan-linked emergency savings accounts, called pension-linked emergency savings accounts, she adds.

Plan sponsors can expect the DOL to release FAQ on emergency savings accounts early in 2024. Separately, the Department of the Treasury is also working on guidance about implementing the accounts, Gomez says.

Other provisions of SECURE 2.0 that the DOL is addressing include:

• The agency was working to meet a December 29 Congressional deadline, Gomez says, as of December 21. Regardless, she says, the DOL will have the review finalized, in Q1.
• A retirement account lost and found database, due by the end of 2024;
• Following on from a request for information, incorporating improvements to Employee Retirement Income Security Act reporting and disclosure requirements by plan sponsors; and
• Separately, working with Congress, the Treasury Department and the Pension Benefit Guaranty Corporation to consolidate and improve the plan sponsors’ disclosures, in terms of simplification, consolidation and standardization.

For the last regulatory item, Gomez says she expects the DOL will publish, jointly, a request for information “in the first quarter of 2024.”

Apart from SECURE 2.0-related rulemaking, the department is expecting to release a rulemaking proposal on proper valuation of employer stock.

“Hopefully, in the first quarter, … we are planning to continue to work on the employee ownership initiative within the Department of Labor to promote employee ownership and also to issue proposed rulemaking with respect to adequate consideration and valuation of employer stock,” Gomez adds.  

Additional Guidance

Gomez says EBSA will continue to work on a new proposed fiduciary advice retirement security standard. This rulemaking seeks to successfully implement a successor rule to the ultimately unsuccessful 2018 fiduciary advice rule that was vacated in federal court.

The comment period on the rule closes after January 2, “and so we will be spending a lot of time within the first quarter reviewing comments and working toward a final rule,” she says.

“From a regulatory standpoint, we are very busy,” she continues. “We are also working on final amendments to our abandoned-plan program, as we have noted in our regulatory agenda … that [that] is going to be a first-quarter 2024 topic.”

Additional items for 2024 include health plan-related topics, as the regulator issued proposed rulemaking, rescinding rules for association health plans with a 60-day comment period; requirements related to the Mental Health Parity and Addiction Equity Act; and additional guidance and regulations for group health plans as the DOL continues working to implement the No Surprises Act and provisions that mandate access to preventative care.

“Stakeholders are going to be very busy with lots of stuff to read and comment on, and it is going to be a busy first quarter for everybody,” Gomez says.