On March 20, 2023, the Consumer Financial Protection Bureau (CFPB) issued a final rule which, among other things, updates their Summary of Your Rights Under the Fair Credit Reporting Act (FCRA) and replaces the 2018 version. The summary details the major rights guaranteed under the act. For instance, employers that use a credit report to deny employment must provide the applicant with the name, address, and phone number of the agency that provided the credit report information. The final rule also makes non-substantive changes to the act to include removing outdated business references. The final rule is effective April 19, 2023, but the mandatory compliance date is March 20, 2024.
Question: What should we know about the new “Secure Act 2.0” and how will it impact our retirement plan?
Answer: On Dec. 29, 2022, President Biden signed the Consolidated Appropriations Act of 2023, an omnibus bill that includes the “SECURE Act 2.0.” The SECURE Act 2.0 is intended to increase employees’ retirement savings. It makes numerous important changes that employers should be aware of. Some key provisions for 401(k) and403(b) plans include the following:
$7,500 (for 2023) to their retirement accounts as a “catch-up contribution.” Beginning in 2025, this limit will increase to$10,000 (or, if greater, 150% of the regular catch-up contribution amount) for employees ages 60 to 63. The increased amount will be indexed for inflation after 2025.
Employers should consult with their retirement plan service providers regarding the Act’s provisions, including how to incorporate the changes into their plans and communicate the new rules to employees.
Late last year, the U.S. Department of Labor (DOL) finalized a rule allowing plan fiduciaries to consider climate change and other environmental, social and governance (ESG) factors when they make investment decisions and exercise shareholder rights. Specifically, the rule clarified the application of the fiduciary duties of prudence and loyalty under the Employee Retirement Income Security Act of 1974 (ERISA) when selecting plan investments and exercising shareholder rights, including proxy voting.
Congress subsequently issued a joint resolution (H.J. Res. 30) that would have nullified the DOL final rule. However, on March 20, 2023, President Biden vetoed the joint resolution. Accordingly, the final rule remains in effect, although additional court challenges to the rule are currently pending.
The final rule provides that a fiduciary’s duty of prudence must be based on factors that the fiduciary reasonably determines are relevant to a risk and return analysis. Under the final rule, such factors may include the economic effects of climate change and other ESG factors on the particular investment or investment course of action.
In addition, the final rule:
A DOL fact sheet on the final rule is available, which further details key changes and provides the procedural background for the rule.
Effective March 10, 2023, U.S. Reservists and Colorado Nation Guard members may take leave for military training for the equivalent of three weeks of work on the employee’s regular work schedule each year. Previously, reservists and national guard members could only take this leave for up to 15 days. They are also now entitled to use any of their paid or unpaid leave for:
4/29 – Remove OSHA Form 300A 04/30 – Form 941 Filing Deadline (Q1)
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