Retirement Plan Outlook: What You Should Know for 2023

January 11, 2023

Kick off the new year by marking your calendars with important compliance requirements. To set your retirement plan up for success, we have summarized some key 2023 action items and deadlines pertaining to single employer tax-qualified plans.

Required Retirement Plan Amendments

There are no required plan amendments for 2023.

In 2022, the Internal Revenue Service (IRS) extended the deadlines for amendments required under the Setting Every Community Up for Retirement Enhancement (SECURE) Act, the Bipartisan American Miners (Miners) Act and certain provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Generally, these amendments are required to be adopted by the end of the 2025 plan year. You can find detailed information on these extended deadlines in our August 2022 and October 2022 Market & Legal Updates.

In addition, the most recent Required Amendments List issued by the IRS on November 22, 2022 (Notice 2022-62) did not identify any required amendments for individually designed qualified and 403(b) plans.

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Tools and Resources for Retirement Plan Sponsors

Plan sponsors do have 2023 compliance deadlines that occur in the normal course of retirement plan administration, as set forth below. In addition, new 2023 cost-of-living limits that apply to retirement plans are also described below.

2023 Retirement Plan Compliance Calendars
Plan sponsors can access further guidance on the regular administrative compliance deadlines in our calendars:

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UPDATED - 2024 Cost-of-Living Adjustments
The IRS publishes cost-of-living adjustments (COLA) applicable to defined benefit and defined contribution plans on an annual basis. Access the 2024 adjustments here.

Recommended Action for Retirement Plan Sponsors in 2023

USI Consulting Group (USICG) recommends that plan sponsors conduct periodic self-audits of their retirement plans.

There are many benefits of self-audits, including:

  • Finding and correcting an operational error as early as possible keeps the costs of correction lower than if the error is found later or discovered on an audit by the IRS or the Department of Labor (DOL)
  • Plan sponsors have the opportunity to establish and implement administrative processes that avoid errors and provide defenses to inquiries from a subsequent IRS or DOL audit
  • Self-audits may reveal potential plan design changes that could be advantageous to the plan sponsor and/or participants

Here’s a reminder of some of the questions plan sponsors can ask themselves in a self-audit:

  1. Does the plan document reflect how the plan is currently being administered? For example, are in-service distributions that have been permitted accurately reflected in the plan document?
  2. When was the last time your benefits and payroll teams reviewed the wage types to confirm they are properly included in or excluded from the definition of compensation used for plan purposes?
  3. Have there been organizational changes (e.g., acquisitions, spin-offs, mergers) that affect the plan’s operation and/or the plan terms?
  4. Does your plan’s loan policy accurately reflect how loans are administered?
  5. Are employee contributions, such as salary deferrals and loan repayments, deposited into the plan on a timely basis? For more detail, see our November Market & Legal Update.
  6. Does the plan’s process for finding missing or nonresponsive participants and beneficiaries comply with the most recent DOL guidance?
  7. Are the plan’s applicable annual compliance tests being conducted?
  8. Has the plan’s Form 5500 been accurately and timely filed?

The following are some steps that may assist you in answering the questions posed above. For a self-audit, a plan sponsor may want to:

  1. Summarize plan provisions and have both human resources and payroll employees participate in reviewing and highlighting pertinent provisions;
  2. Review any administrative processes that implement these plan provisions;
  3. Delegate plan processes to appropriate personnel and/or service provider to optimize accountability; and
  4. Choose a sampling of participants and retirees, including newly eligible employees. Review entry dates, deferral elections and/or employer contributions, and, if applicable, matching contributions, loans, hardship withdrawals, other in-service distributions, post-employment termination distributions, and required minimum distributions, to ensure they comply with plan provisions.

Once you have completed and documented the results of a 2023 self-audit of your plan(s), the self-audit process will be easier to undertake in ensuing years.

This information is provided solely for educational purposes and is not to be construed as investment, legal or tax advice. Prior to acting on this information, we recommend that you seek independent advice specific to your situation from a qualified investment/legal/tax professional. | 1022.S1227.99163