Newly-Eligible Retirement Savers Excluded From Fairness Tests
Tax-exempt employers may exclude long-term part-time workers from retirement plan benefits fairness testing, according to new IRS guidance.
Starting next year, more temporary and part-time employees will be able to enroll in their employers’ 403(b) retirement plans under the SECURE 2.0 Act. The 2022 law broadening workplace retirement plan access has given rise to questions among charitable organizations and universities that offer those plans about how it will affect nondiscrimination testing.
The US Treasury Department and IRS guidance (Notice 2024-73) issued Thursday clarifies that actual contribution percentage tests ensuring retirement benefits don’t disproportionately favor highly compensated workers don’t have …