PLANSPONSOR - March - April 2023 - 8
UPFRONT
How SECURE 2.0 Helps Small Businesses
THE SECURE 2.0 Act of 2022-which
extended the Setting Every Community
Up for Retirement Enhancement Act of
2019-among many other things, offers
increased tax credits to small businesses to
encourage plan creation. These tax credits
were expanded to such an extent that Joe
DeBello, vice president of OneDigital
Retirement and Wealth, remarked at a
webinar recently that it will be " next to
impossible for small businesses to not be
able to offer a retirement plan. "
On January 1,
the new retirement
reform law increased the three-year
startup tax credit to 100% of administrative
costs-up from what had been 50%-
with an annual maximum of $5,000, for
employers with up to 50 employees.
Chad Parks, founder and CEO of
Ubiquity Retirement and Savings, a 401(k)
provider specializing in small businesses,
says this should be a big deal for those
employers. He remarks that this provision
" basically says to the small-business owner
that the federal government is so serious
about getting you into the retirement
system that it is willing to pay the startup
costs for the first three years. "
Parks explains that, because smallbusiness
plans rarely cost
in excess of
$5,000 a year to administer, this effectively
makes the plan setup free over that time.
For small businesses sponsoring a
new defined contribution plan, SECURE
2.0 also credits employer contributions.
" The amount of the additional credit
generally will be a percentage of the
amount contributed by the employer on
8 PLANSPONSOR.COM March - April 2023 Art by Changyu Zou
behalf of employees, up to a per-employee
cap of $1,000. This full additional credit
is limited to employers with 50 or fewer
employees and phased out for employers
with between 51 and 100 employees. The
applicable percentage is 100% in the first
and second years, 75% in the third year,
50% in the fourth year, 25% in the fifth
year and no credit for tax years thereafter, "
according to the Senate Finance
Committee. This provision also took
effect January 1.
Section 111 of SECURE 2.0 states that
joining a pooled or multiple employer plan
counts as creating a plan, for purposes of
applying the three-year administrative-cost
tax credit. This provision is retroactive for
plans created after December 31, 2019.
SECURE 2.0 additionally exempts
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PLANSPONSOR - March - April 2023
Table of Contents for the Digital Edition of PLANSPONSOR - March - April 2023
INSIGHTS
PARTICIPANT ANALYSIS
RULES & REGULATIONS
UPFRONT
PLAN DESIGN
PARTICIPANTS
INVESTMENTS
PLAN ACCESS
GOVERNANCE
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - March - April 2023 - Cover1
PLANSPONSOR - March - April 2023 - Cover2
PLANSPONSOR - March - April 2023 - 1
PLANSPONSOR - March - April 2023 - INSIGHTS
PLANSPONSOR - March - April 2023 - 3
PLANSPONSOR - March - April 2023 - PARTICIPANT ANALYSIS
PLANSPONSOR - March - April 2023 - 5
PLANSPONSOR - March - April 2023 - RULES & REGULATIONS
PLANSPONSOR - March - April 2023 - 7
PLANSPONSOR - March - April 2023 - UPFRONT
PLANSPONSOR - March - April 2023 - 9
PLANSPONSOR - March - April 2023 - 10
PLANSPONSOR - March - April 2023 - 11
PLANSPONSOR - March - April 2023 - 12
PLANSPONSOR - March - April 2023 - 13
PLANSPONSOR - March - April 2023 - PLAN DESIGN
PLANSPONSOR - March - April 2023 - 15
PLANSPONSOR - March - April 2023 - 16
PLANSPONSOR - March - April 2023 - 17
PLANSPONSOR - March - April 2023 - 18
PLANSPONSOR - March - April 2023 - 19
PLANSPONSOR - March - April 2023 - PARTICIPANTS
PLANSPONSOR - March - April 2023 - 21
PLANSPONSOR - March - April 2023 - 22
PLANSPONSOR - March - April 2023 - 23
PLANSPONSOR - March - April 2023 - 24
PLANSPONSOR - March - April 2023 - 25
PLANSPONSOR - March - April 2023 - INVESTMENTS
PLANSPONSOR - March - April 2023 - 27
PLANSPONSOR - March - April 2023 - 28
PLANSPONSOR - March - April 2023 - 29
PLANSPONSOR - March - April 2023 - PLAN ACCESS
PLANSPONSOR - March - April 2023 - 31
PLANSPONSOR - March - April 2023 - 32
PLANSPONSOR - March - April 2023 - 33
PLANSPONSOR - March - April 2023 - GOVERNANCE
PLANSPONSOR - March - April 2023 - 35
PLANSPONSOR - March - April 2023 - 36
PLANSPONSOR - March - April 2023 - 37
PLANSPONSOR - March - April 2023 - FIDUCIARY FORUM
PLANSPONSOR - March - April 2023 - INSIDE ANGLE
PLANSPONSOR - March - April 2023 - PLAN PROFILE
PLANSPONSOR - March - April 2023 - Cover3
PLANSPONSOR - March - April 2023 - Cover4
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