Ronald Cluett Weighs in on SECURE 2.0 Retirement Provisions in Tax Notes
Employee benefits practitioners are hoping for government action to address a technical error in SECURE 2.0 retirement provisions that inadvertently prohibits catch-up contributions beginning in 2024.
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Ronald G. Cluett of Caplin & Drysdale said that although the plan amendment deadlines for the SECURE 2.0 provisions are not imminent, plan sponsors would be required to comply operationally before the start of 2024.
“Absent timely guidance, plan sponsors — and their [third-party administrators] — may have to prohibit all catch-up contributions effective January 1, 2024, until the issue is resolved in a way that provides authority on which they can rely for operational compliance,” Cluett said.
Bob Toth of the Law Offices of Robert J. Toth Jr. shared Cluett’s concerns about what could happen without a solution but echoed Richman’s confidence in the government.
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But Cluett expressed skepticism about NAGDCA’s suggested use of general doctrines to issue guidance.
“It is not yet clear how Treasury can or will address it, particularly when no legislation is currently pending before Congress which could provide some specific authority beyond general doctrines such as legislative history and the absurdity principle to disregard the plain meaning of the statute,” Cluett said. “This leaves plan sponsors in a bind.”
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- Of Counsel