Seyfarth Synopsis: The IRS issued Notice
2020-86, which provides guidance on the rules that apply to safe
harbor plans that were changed by the Setting Every Community Up
for Retirement Enhancement Act of 2019 (the "SECURE
Act"). The guidance covers the increase in automatic
contributions permitted under a qualified automatic contribution
arrangement (or "QACA") safe harbor plan, safe harbor
notice requirement changes, and issues related to the retroactive
adoption of safe harbor status.
The SECURE Act included a number of changes to the rules that
apply to safe harbor plans. As described in our prior Legal Update
available
here, the SECURE Act (1) increased the 10% cap on automatic
contributions under a QACA to 15%, (2) eliminated the requirement
that a non-elective safe harbor plan notify participants of the
plan's safe harbor status before the beginning of the plan
year, and (3) established new rules that permit the adoption of a
non-elective safe harbor plan
