FOR IMMEDIATE RELEASE
Letter urges Treasury to address erroneous final text until legislative action can be taken to bring the provision in line with original Congressional intent
Lexington, KY, February 9, 2023—The National Association of Government Defined Contribution Administrators (NAGDCA) today announced that it has sent a communication to legal counsel at the U.S. Department of the Treasury and Internal Revenue Service requesting guidance for correcting a drafting error contained in the final version of Section 603 of the recently passed SECURE 2.0 bill. NAGDCA is the premier professional association for plan administrators and services providers of government-sponsored defined contribution retirement plans.
A drafting error in the final version of the bill eliminated important text that executes the provision requiring catch-up contributions be made to defined contribution plans on a Roth basis, except for those with $145,000 or less in wages for the prior year.
In a letter from Executive Director Matt Petersen, NAGDCA “submit[s] that Treasury could issue guidance to the public now following the approach it used in Notice 2007-99 with respect to the interpretation of Internal Revenue Code section 402(1) as added by the Pension Protection Act of 2006; that is, that the agency is issuing guidance in expectation of a future legislative correction.”
Petersen notes that “This approach is reasonable, as the relevant lawmakers and their staff are aware of this technical error, but may have difficulty finding a timely legislative vehicle to immediately advance such a correction.”
He then states that “…enough legislative history exists for Treasury to properly issue guidance stating that it will follow Congressional intent for the provision, rather than the erroneous final text…” And that “…Treasury could rely on the absurdity principle of statutory construction to arrive at the conclusion that Congress did not intend to pass legislation that is clearly ineffective.”
The letter was submitted to Rachel Levy, Associate Chief Counsel, Employee Benefits, Exempt Organizations, and Employment Taxes, Internal Revenue Service; Carol Weiser, Benefits Tax Counsel, Office of Tax Policy, U.S. Department of the Treasury; and Helen Morrison, Deputy Benefits Tax Counsel, Office of Tax Policy, U.S. Department of the Treasury.
A copy of the letter is available upon request.
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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Robin Schoen Public Relations