New pension act

You're referring to the new pension act in the United States!

The Setting Every Community Up for Retirement Enhancement (SECURE) Act, also known as the SECURE Act, was signed into law on December 20, 2019. The act makes significant changes to the rules governing retirement plans, including pensions, 401(k)s, and IRAs. Here are some key provisions:

  1. Raising the Required Minimum Distribution (RMD) age: The RMD age has been increased from 70 1/2 to 72, allowing individuals to delay taking RMDs from their retirement accounts for longer.
  2. Eliminating the Stretch IRA: The SECURE Act eliminates the stretch IRA, which allowed beneficiaries to take RMDs over their own life expectancy. Instead, most non-spouse beneficiaries will be required to take RMDs within 10 years of the account owner's death.
  3. Increasing the catch-up contribution limit: The catch-up contribution limit for 401(k) and other retirement plans has been increased to $6,500 in 2022, up from $3,000 in 2020.
  4. Allowing part-time workers to participate in 401(k) plans: The SECURE Act allows part-time workers who have worked at least 1,000 hours in a year to participate in their employer's 401(k) plan.
  5. Encouraging annuity options: The act encourages plan sponsors to offer annuity options to plan participants, which can provide a guaranteed income stream in retirement.
  6. Improving plan administration: The SECURE Act simplifies plan administration by reducing the paperwork and administrative burdens on plan sponsors.
  7. Increasing the penalty for failing to file a Form 5500: The act increases the penalty for failing to file a Form 5500, which is used to report plan information to the IRS.

These changes aim to improve retirement security and flexibility for Americans, while also reducing administrative burdens on plan sponsors.