SECURE 2.0 Act: Learn about important changes to the RPB plan.
Late last year, Congress passed the SECURE 2.0 Act to encourage more employers to offer retirement plan benefits and more employees to save for their future through their employer. It impacts all retirement plans, including RPB’s.
Some of the SECURE 2.0 provisions are already in effect, while others will roll out over the next few years.
SECURE 2.0 will impact RPB’s plan in the following ways:
Higher catch-up amount for participants aged 60 - 63
Participants between the ages of 60 and 63 will be able to make catch-up contributions up to $10,000 or 50% more than the standard catch-up amount, whichever is greater, starting in 2025. (In 2023, the catch-up limit for people ages 50 and older is $7,500.)
High earners must use Roth option for catch-up contributions
Effective 2026 for high earners
Beginning in 2026, participants aged 50 and older who earned more than $145,000 in the prior calendar year (indexed for inflation) at their current employer will be required to make catch-up contributions on a post-tax Roth basis. While this will increase the immediate tax burden of high earners who are currently making catch-up contributions with pre-tax dollars, qualified Roth withdrawals, including earnings, are free from federal income taxes.
RPB is working to ensure a smooth transition for participants by the effective date.
Required Minimum Distributions
Increased RMD starting age
The age at which Required Minimum Distributions are payable has increased from 72 to 73 for participants turning 72 in 2023 or later and will increase to age 75 for participants turning 74 in 2033 or later. This helps participants who are closer to or at retirement keep their money in their tax-advantaged retirement account for longer.
|Age at Which RMD Begins
1950 or earlier
|72 (70 1/2 for those who turned 70 1/2 prior to 2020)
1951 - 1959
1960 or later
Reduced late RMD penalties
The 50% excise tax imposed on recipients who miss their annual RMD deadline is now reduced to 25%. It will be further reduced to 10% when a correction is made within a certain timeframe.
No RMDs for Roth 403(b) balances
Effective January 1, 2024
Roth 403(b) balances will no longer be subject to RMDs during a participant’s lifetime. (However, for retirees who reach age 73 in 2023, Roth account RMDs must still be made by April 1, 2024.)
Flexible RMD start date for surviving spouses.
Effective January 1, 2024
The surviving spouse of a plan participant will be able to choose whether to use their own age or their deceased spouse’s age to determine when their RMDs will begin. This may be used to delay the start of RMDs and/or increase the period of time over which the surviving spouse receives payments.
More Early Withdrawal Options
Various effective dates
Participants will be able to take penalty-free early withdrawals under certain circumstances. These provisions will be available as soon as Fidelity, our recordkeeper, can implement them. We will update participants once they are live. Meanwhile, if a situation arises, participants should call RPB and we will try to work out a solution.
Typically, participants face a 10% penalty for withdrawing funds from their account before the age of 59.5 if they are still working. Under Secure 2.0, that penalty will be waived if the participant is:
- Diagnosed with a terminal illness (effective immediately)
- To qualify, the participant must provide sufficient evidence of the terminal illness as required by the IRS.
- The withdrawal may be repaid within three years. If it is not repaid, the income will apply to the year of the withdrawal.
- Impacted by a qualified federally declared disaster (effective for disasters occurring after January 26, 2021)
- The participant can withdraw a maximum of $22,000 without paying the 10% early withdrawal penalty and the withdrawal may be repaid. Additionally, the participant can take out a loan of up to $100,000 (double the normal limit) and has an extra year to repay that loan.
- To qualify, the participant's primary residence must be located in the disaster area, they must have sustained economic loss because of the disaster, and the disaster must have occurred after January 26, 2021.
- A victim of domestic abuse (effective January 1, 2024)
- The participant may request a withdrawal of up to $10,000 or 50% of their account balance, whichever is less. They will have the opportunity to repay the withdrawn amount to their retirement plan over three years and will receive a refund for income taxes on the money they repay.
- To qualify, the participant can self-certify their status as a victim of domestic abuse within one year of the date they experienced the abuse.
Inclusion of more part-time employees
Long-term, part-time employees are now eligible to enroll in RPB’s plan when they work an average of 9 to 17 hours per week (at least 468 – 935 hours annually) for two or more years in a role that does not require membership in a Reform Movement professional organization.
This includes employees in administrative, finance, custodial, security, seasonal, and other roles. See our eligibility page for more details.
As SECURE 2.0 provisions continue to roll out, RPB will be in direct contact with affected participants. Make sure to keep an eye out for important updates.