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How the SECURE Act Could Change the Landscape for Retirement Plans and IRAs – Perspectives for Employers, Asset Managers and Insurance Companies

On December 20, 2019, President Trump signed into law the fiscal year 2020 spending bill, which included the Setting Every Community Up for Retirement Enhancement Act (SECURE Act). The SECURE Act makes significant changes to the operation of private retirement plans, including: (i) allowing for unrelated employers to join together to offer a multiple employer retirement plan (referred to as an “Open MEP”); (ii) easing plan sponsors’ ability to offer in-plan annuities (and making it simple for those same annuities to be transferred to another eligible retirement plan) and (iii) allowing certain part-time workers to be eligible to participate in 401(k) plans.

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Proposed Regulations Issued on Deferred Compensation Arrangements for Tax-Exempt Organizations


Time to Read: 1 minutes Practices: Executive Compensation & Employee Benefits, Tax-Exempt Organizations

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Today, Treasury and the IRS released proposed regulations under §457 of the Code, which governs the tax treatment of nonqualified deferred compensation paid to employees and independent contractors by tax-exempt organizations and state and local governments. The proposed regulations define key §457 terms, such as “substantial risk of forfeiture” and “bona fide severance pay plan,” and they include many other provisions regarding the treatment of deferred compensation under §457.

Today’s release also includes some modifications to the regulations under §409A, including changes to align with the proposed §457 regulations.

To see the proposed §457 regulations, click here. We will be issuing an Alert with a more comprehensive overview of the new proposed §457 regulations, as well as an Alert on the proposed §409A regulations. Meanwhile, please contact your Ropes & Gray advisor with any questions about the proposed §457 regulations.

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