Congress has passed long-awaited retirement legislation under Division T of the Consolidated Appropriations Act of 2023 known as the SECURE 2.0 Act of 2022 (the “Act”), which awaits the President’s signature. The Act is a culmination of three closely-watched bills: the House bill known as the Securing a Strong Retirement Act, and two Senate bills – the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act, and the Enhancing American Retirement Now (EARN) Act. The Act amends the Internal Revenue Code and the Employee Retirement Income Security Act in certain key ways and the following is a brief summary of the provisions that 401(k) and 403(b) retirement plan sponsors (as applicable) should note for plan design and administration purposes:

• RMDs. The Act provides an increase in the age for required minimum distributions (RMDs) effective for distributions made after December 31, 2022 with respect to individuals who attain age 72 after that date. The new applicable required beginning date age is age 73 (for those who attain age 72 after December 31, 2022 and age 73 before January 1, 2033), and age 75 (for those who attain age 74 after December 31, 2032). There are also other changes to RMD rules for tax years after the date of the Act’s enactment such as eliminating a penalty on partial annuitization and allowing participants to elect aggregate distributions from both portions of a retirement account to meet...

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