FOR IMMEDIATE RELEASE
Lexington, KY, August 25, 2023 – The National Association of Government Defined Contribution Administrators (NAGDCA) today expressed its appreciation for authorization by the Treasury and IRS of a two-year transition period on Section 603 of SECURE 2.0. NAGDCA is the premier professional association for plan administrators and services providers of government-sponsored defined contribution retirement plans.
“NAGDCA applauds the Treasury department and IRS for authorizing a two-year transition period on Section 603 of SECURE 2.0,” said Matt Petersen, NAGDCA Executive Director. “Leadership at both agencies engaged openly with us on the issue, and we felt our concerns were heard every step of the way. Today’s guidance is an excellent example of the results of an open, fair, and considerate process.”
”Guidance on Section 603 of the SECURE 2.0 Act with Respect to Catch-Up Contributions” (Notice 2023-62), released today, addresses the requirement that, “in the case of certain eligible participants, catch-up contributions under 414(v)(1) of the Internal Revenue Code (Code) must be designated as Roth contributions pursuant to an employee election.”
Of specific relevance for government-sponsored defined contribution retirement plans, this guidance addresses “particular issues to assist in the implementation of that section. This notice also announces a 2-year administrative period with respect to the requirement under section 603 of the SECURE 2.0 Act that catch-up contributions made on behalf of certain eligible participants be designated as Roth contributions.”
Further, this guidance notes that “The Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) have been made aware of taxpayer concerns with being able to timely implement section 603 of the SECURE 2.0 Act. The administrative transition period described in this notice is intended to facilitate an orderly transition for compliance with that requirement.”
Full text of the guidance may be accessed here.
ABOUT NAGDCA
NAGDCA provides education, information, and training in all aspects of public plan administration to support members in creating plans that enable secure retirement outcomes for their participants. National Retirement Security Week, originally conceived by NAGDCA to encourage retirement saving among government workers, has grown into National Retirement Security Month, a national effort to inspire American employees to save adequately for a secure retirement that is observed throughout the retirement industry during the month of October. It has received bipartisan Senate resolution since its conception in 2006. To learn more about NAGDCA, visit https://www.nagdca.org/.
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