Ask the Experts December 5, 2023

How Does the New Long-Term Part-Time Rule Affect 403(b) Plans?

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.

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Q: How does the new Long-Term Part-Time employee rule under the SECURE 2.0 Act of 2022 affect 403(b) plans, since we already have a universal availability requirement?

Kimberly Boberg, Taylor Costanzo, Kelly Geloneck and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

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A: The answer is: We’re still waiting to see. The IRS recently released comprehensive proposed regulations on the new LTPT rules, although they did not clearly address how these regulations will be applied to 403(b) plans. The good news is that the LTPT provision of the SECURE 2.0 Act is not effective until the 2025 plan year, and the Experts are hopeful the IRS will provide more clarity in 2024. Of course, PLANSPONSOR will provide updates as soon as any guidance is issued.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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