With only weeks until the end of the calendar year, retirement plan fiduciaries are busy preparing for 2024. Now is an ideal time to reflect on past performance and determine how to improve in the year ahead. 

In this Q+A, Kathy Peterson, CPFA™, AIF®, CRPC®, a senior retirement plan consultant at Aldrich Wealth, shares what fiduciaries can do before year-end, upcoming legislation, and the opportunities ahead. Kathy was recently named a 2023 NAPA Top Women Advisor in the All Stars category, which honors top performers in their own practice.  

Kathy: Fiduciaries always have a challenging role, and ever-changing regulations such as the SECURE 2.0 Act added to the complexity in 2023. With more than 90 required and optional provisions, the Act puts a significant administrative burden on retirement plan fiduciaries and their service providers. Fiduciaries should consult with their advisors and recordkeepers to ensure they are ready to comply with the required provisions and consider how to incorporate the optional ones.  

One provision that fiduciaries and their advisors should plan for now relates to the original SECURE Act, which passed in 2019. Long-term part-time employees who have worked more than 500 hours for three consecutive years (2021, 2022, and 2023) need to be permitted to enter the 401(k) portion of the retirement plan on January 1, 2024. The SECURE 2.0 Act will further amend these requirements in 2025—another example of changing regulations that fiduciaries must track and implement.

Kathy: The Consolidated Appropriations Act (CAA) of 2021 amended 408(b)(2) to impose fee disclosure requirements on employer-sponsored health plans. These are the same disclosure requirements that retirement plans have worked with for over a decade.   

Health plan fiduciaries may not know they need to get these disclosures. Even if they receive them, the fiduciaries may not realize their duty to ensure the fees are reasonable. Since the Employee Retirement Income Security Act (ERISA) also covers employer-sponsored health plans, fiduciaries should take their responsibilities seriously because they can be personally liable for any breaches.  

An advisor can help fiduciaries adopt the same risk mitigation strategies they use for their retirement plans. These may include identifying fiduciaries, forming a committee, establishing a process for reviewing and monitoring, documenting actions, and delegating fiduciary responsibilities when needed.

Kathy: The Department of Labor (DOL) and the SECURE 2.0 Act introduced a new development that may eliminate the need for an audit for certain plan sponsors, starting on January 1, 2024. Earlier in 2023, the DOL announced significant changes for the 2023 Form 5500 and Form 5500-SF filings, altering the participant-counting methodology that determines whether a plan requires an audit. Under the updated guidelines, only participants with an account balance on the first day of the plan year will be counted. The previous method counted all eligible participants on the first day of the plan year. This change, plus the increased force-out threshold to $7,000—which goes into effect in 2024 for plans that choose to adopt this provision—may remove audit requirements for some retirement plans. 

Kathy: Plan sponsors regularly talk to me about the concerns they have related to the administrative burden of operating a retirement plan. It is an ever-changing, complex landscape that fiduciaries must navigate—and they need help! They already have full-time jobs, so the retirement plan is often one more thing to worry about. Without an advisor who really understands their goals and can provide the knowledge they need around their fiduciary responsibilities, they may have increased risk—which is not good for anyone.    

Kathy: It means a lot to be recognized among this accomplished group of women in our industry, and it makes me want to work harder to assist our clients in being great stewards of their retirement plans. It also reflects the high level of service Aldrich Wealth provides and the relentless dedication to serving our clients.