SECURE 2.0 Highlights: Replacing a SIMPLE Plan with a Safe Harbor Plan
Help clients navigate midyear SIMPLE IRA terminations under IRS Notice 2024-02, including key compliance steps and contribution limits when transitioning to a Safe Harbor 401(k). Learn more about the IRS’s guidance on documentation, rollover rules, and contribution coordination during the plan switch.
- Executing midyear transitions: Guide clients through the formal process of terminating a SIMPLE IRA and adopting a Safe Harbor 401(k) without triggering compliance issues.
- Maximizing rollover flexibility: Help clients take advantage of the IRS’s penalty waiver for early SIMPLE IRA distributions rolled into a 401(k) or 403(b).
- Monitoring contribution limits: Educate clients on applying the IRS’s weighted average formula to ensure total contributions across both plans remain within legal limits.
In this episode of our SECURE 2.0 Highlights video series, we shed light on the new provision that enables employers to terminate a SIMPLE IRA plan mid-year to adopt a safe harbor 401(k) plan. We explain the process, including how employers can set termination and effective dates, and the requirement to notify employees 30 days prior to termination, ensuring all contributions are made by then.
For an in-depth understanding of the SECURE 2.0 Act, visit Ascensus' dedicated resource center.
Ascensus is a market-leading enabler of tax-advantaged savings—providing technology, services, and expertise that help more than 15 million people save for a better future.
The company is a premier savings program service provider, third-party administrator, and government savings facilitator. Our platforms, industry knowledge, and data-based insights enhance the growth and success of our partners, their clients, and savers through co-branded, private-labeled, and governmental partnerships.
Ascensus offers comprehensive qualified and non-qualified retirement plan solutions, third-party retirement plan administration, 529 education and ABLE savings program administration, corporate- and bank-owned life insurance solutions, and fiduciary and total rewards services. The company’s brands include Ascensus; Newport, an Ascensus company; and FuturePlan by Ascensus.