SECURE 2.0 Highlights: Financial Incentives for Contributions
Help clients understand how to use de minimis financial incentives to boost retirement plan participation under IRS Notice 2024-02. Explore eligibility rules, tax treatment, and open questions surrounding third-party incentives.
- Encouraging participation: Help clients design compliant incentive programs—up to $250 in value—to motivate employees without existing deferral elections to join 401(k) or 403(b) plans.
- Understanding tax implications: Educate clients on how incentives like gift cards are treated as taxable wages and why matching contributions cannot be used as incentives.
- Navigating unresolved issues: Advise clients on the IRS’s request for comments regarding third-party incentives and how future guidance may impact plan design flexibility.
This insightful episode of our SECURE 2.0 Highlights video series reveals how employers can now offer small incentives to encourage employees to contribute—specifically targeting those who aren't contributing yet. We'll dig into the details of this new provision and how it can positively impact retirement plan engagement in your organization.
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.