12/2/24 Five Employee Benefits Steps to Take Today Before the End of the Year
By Jeff Robertson & Iris Tilley
A few steps of prevention and foresight planning can save your organization time and money into 2025. We offer five steps to think about as 2024 closes and 2025 begins.
1. Update 401(k) Plan Documents and Payroll Procedures for Secure 2.0
There are many provisions coming into effect related to Secure 2.0. Employers must make sure their plan documents contain the proper Required Minimum Distribution ages and procedures; consider updating Hardship provisions; and prepare for Roth designation of high wage earner catch-ups (which takes effect in 2026). Payroll policies and procedures must be prepared for the beginning of “Long Term Part Time” employees as eligible employees.
2. Mental Health Parity in Health Plan Documents
This fall several departments worked together to issue final regulations relating to Mental Health Parity. The final regulations focus on Non-Quantitative Treatment Limitations (“NQTL”) and link medical and surgical benefit offerings with mental health benefits. It is important to review both your plan documents and active procedures to ensure mental health parity compliance in 2025.
3. Take Advantage of Non-Qualified Deferred Compensation Opportunities
Many non-qualified deferred compensation benefits must be adopted prior to December 31, and some prior to December 1, in order to qualify for tax favored benefits relating to non-qualified deferred compensation.
4. Update Plan Documents for Cybersecurity and Fiduciary Best Practices
With the Supreme Court’s recent decision overturning the Chevron deference and the continued assault on Plan assets from cybersecurity threats, it is critical to update Plan Documents for both retirement and health plans to ensure the deference enjoyed by Fiduciary decisions will survive the Chevron decision. In addition, Plan Documents and Summary Plan Descriptions should be updated for cybersecurity responsibility and procedures. All employers should maintain an annual record of a formal review of vendor cybersecurity policies. It is also important to review and understand third-party service agreements that may have been entered into several years ago and not updated for changes in the law.
5. Review your Plan Offerings for Current Marketplace
We often find employers have entered into a relationship with their retirement and/or health plan offerings based on what might have been in the market five or ten years prior and have not reviewed new opportunities over several years. With the pandemic and current economic conditions, it is easy to find that 5-10 years have passed since clients reviewed service providers and opportunities with the plan. We encourage clients to ask themselves, “What if I was going to market now - would I recommend the same technology, price, and
benefits?” Regular review is a key fiduciary concept.
The Barran Liebman Employee Benefits Group assists employers with retirement and health plans. Please contact Jeff Robertson at 503-276-2140 or jrobertson@barran.com, or Iris Tilley at 503-276-2155 or itilley@barran.com, or your regular attorney at Barran Liebman if you have any questions.