Employer

Employer resource articles

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Read articles of interest for district administrators, payroll coordinators, and other district administrative staff.

Articles are available from the past year and are sorted by quarter based on the Benefits NewsBrief email for Wisconsin public school district employers. If you would like to be alerted to timely articles, please sign up at the Benefits NewsBrief subscription page.


July 2022

April 2022

January 2022

October 2021


July 2022 articles

>>RISE and SHINE Act and SECURE Act 2.0 >>Before sending in funds for your new employee, verify their 403(b) account is open
>>SECURE Act, CARES Act and CAA Amendments are in Process >>Important information for Plan Sponsors that offer hardship withdrawals
>>Do you need to update employment status for your employees?

RISE and SHINE Act and SECURE Act 2.0

On March 29, 2022, The Securing a Strong Retirement Act of 2021 (SECURE 2.0) passed in The House of Representatives.  On June 14, 2022, the Senate Health, Education, Labor, and Pension (HELP) Committee approved the Retirement Improvement and Savings enhancement to Supplement Health Investments for the Nest Egg (RISE and SHINE).  RISE and SHINE acts are the HELP Committee’s version of SECURE 2.0.

Provisions in both bills:

  • Allowing 403(b) plans to participate in multiple employer plans (MEPs) and pooled employer plans (PEPs)
  • Reducing the required years of service from three to two for part-time employees to be allowed to participate in an employer’s retirement savings plan
  • Directing DOL to modify regulations concerning performance benchmarks for asset allocation funds

Provisions in SECURE 2.0 but not in RISE and SHINE Act:

  • The required minimum distributions (RMD) required begin date may be pushed back from age 72 to age 73, then age 74 starting in 2029, and to age 75 in 2032.
  • Employees between the ages of 62 and 64 would be able to contribute additional catch-up contributions up to $10,000. This is an increase from the current age 50 catch-up contribution of $6,500.
  • Employers may be able to match employee student loan payments with contributions into a retirement savings plan.

Provisions in RISE and SHINE Act but not in SECURE 2.0:

  • Retirement Plan Modernization Act, amending the cash-out limit from $5,000 to $7,000.  Employers would be allowed to transfer employee’s retirement accounts out of the employer plan to an Individual Retirement Account (IRA) if their balance is between $1,000 and $7,000.
  • Pooled Employer Plans (PEP) Modification, defines fiduciary responsibilities for collecting contributions in PEP and requires a written contribution collection procedure.

It is important to remember that the proposed bill mostly likely will change and not all these items may impact your 403(b) plan.  We will continue to monitor.  In addition to the RISE and SHINE Act, The Senate Finance Committee released the Enhancing American Retirement Now (EARN) Act on June 17, 2022.  The EARN Act contains a mix of the provisions from SECURE 2.0 and RISE and SHINE Act.

Provisions in EARN Act but not in RISE and SHINE Act or SECURE 2.0:

  • Includes Starter-K Act, which creates starter retirement plans that streamline regulations and lower costs for small businesses. The defined contribution plans could be established under a 401(k) and 403(b).
  • Enhanced Saver’s Match modifies the existing Saver’s Credit for IRA and retirement plan contributions by changing it from a cash tax refund to a government matching contribution that must be deposited into a taxpayer’s IRA or retirement plan. The credit would be 50% of IRA or retirement plan contribution up to $2,000 per individual.  The credit rate does phase out for taxpayers filing a joint return between $41,000 and $71,000 ($20,500 to $35,500 for single taxpayers).

The Senate Finance Committee meet again on June 22, 2022, and they unanimously approved the EARN Act.  The full Senate will vote on the RISE and SHINE Act and the EARN Act.  The prediction is that the full Senate will pass both Acts.  If this happens, a reconciliation process through which House and Senate leadership would draft the final bill or bills.  The final bill(s) will be voted on by both chambers and sent to President Biden for signature.

We will communicate with you about any possible changes that may impact your 403(b) plan.  If you have any questions, contact Plan Administration at 1-800-279-4030, Extension 8579, or WEAPlanAdmin@weabenefits.com.

Before sending in funds for your new employee, verify their 403(b) account is open

Summer is the kickoff for new hire paperwork. It can be easy to overlook an item. The enrollment into a 403(b) is a two-step process. A vendor application and a salary reduction agreement need to be completed. We are here to make the process easy for you and your employees.

A few ways to help your employees get started saving include:

  1. Setting up automatic enrollment into the 403(b) plan. Call your Worksite Benefits Consultant for more information.
  2. Utilizing the online Salary Reduction Agreement (SRA). Call your Worksite Benefits Consultant for more information.
  3. Providing your employees with 403(b) enrollment resources by accessing the new Retirement Savings and Enrollment Materials landing page that offers a quick way to access the new enrollment information for your employees.
  4. Providing employees with one or all of the following:

SECURE Act, CARES Act and CAA Amendments are in process

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act), the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Consolidated Appropriations Act (CAA) require Plan Sponsors to adopt them into their plans. In February, we began the process of reaching out to districts that use WEA Member Benefits’ plan documents to assist them with incorporating these Acts into their district’s plan documents. If WEA Member Benefits’ is your district’s plan document provider, please watch for email notifications and education opportunities from your district’s Worksite Benefit Consultant.

If you have any questions, contact Plan Administration at 1-800-279-4030, Extension 8579, or WEAPlanAdmin@weabenefits.com.

Important information for Plan Sponsors that offer hardship withdrawals

To assist you with your hardship request reviews, we are providing you with the WEA TSA Trust 403(b) program hardship procedure.  The following information contains important information about how an employee can apply for a hardship withdrawal from their WEA TSA Trust 403(b) account.  It is important to review the hardship procedures of all your vendors.

Procedure for Applying for a Hardship Withdrawal

A hardship withdrawal applicant must be an active participant in a school district 403(b) plan whose plan document allows for hardship withdrawals.  The applicant must complete a 403(b) Hardship Withdrawal Request and submit the completed form and supporting documentation to the plan administrator (vendor or third party administrator).  Hardship withdrawal forms may be obtained from the plan participant’s 403(b) vendor.

Hardship Distribution Events

  • Non-reimbursable medical expenses for self, spouse, children, dependents, or primary beneficiary. (Copies of actual dental or medical bills which clearly state your insurance does not cover the expense.)
  • Purchase of primary residence – excludes mortgage payments. (Copy of the binding contractual agreement including addendums, if any, to build or purchase home, signed by both parties – buyer and seller – of the contract.)
  • Tuition for post-secondary Education and related educational expenses for self, spouse, children, dependents, or primary beneficiary. (Copies of actual bills for future tuition of up to the next 12 months.  Bills from previously attended semesters or student loans are not acceptable documentation.)
  • Prevention of eviction from primary residence. (Copy of eviction notice-either court ordered or letter from the landlord.  The notice must clearly state the dollar amount that is due before eviction meetings are to take place.  The landlord must clearly identify himself/herself as the landlord of the property and provide contact information-address and phone number.)
  • Prevention of foreclosure from primary residence. (Copy of the foreclosure notice from the financial institution or court order.  The attachment must clearly state the dollar amount that is due and the date it is due in order to remedy foreclosure proceedings.   The financial institution’s name must be on letterhead, and it must be signed by the institution’s representative.)
  • Funeral expenses for immediate family including primary beneficiary. (An invoice or accounts payable statement from the funeral provider, church, and/or cemetery.)
  • Repair of damage to primary residence that qualifies for casualty tax deduction (Detailed invoices or accounts payable statement from home repair providers indicating amounts still due after insurance payment.)
  • Expenses and losses incurred because of a federally declared disaster. (Residence or place of business must be in the disaster area at the time of the disaster.)

Elimination of Loan First Requirement

  • Effective April 2019, or the first day of the first plan year beginning in 2019 if later, the requirement to take all available non-taxable plan loans prior to taking a hardship distribution was eliminated.
  • Eliminating the loan requirement was optional in 2019 plan year but mandatory as of January 1, 2020.
  • All other available distributions must still be taken prior to taking a hardship distribution.

Elimination of the Six-Month Suspension Period

  • Effective April 2019, or the first day of the first plan year beginning in 2019 if later, the six-month suspension period for new hardship distributions was eliminated.
  • Eliminating the suspension was optional in the 2019 plan year but mandatory for hardship distributions on or after January 1, 2020.
  • The plan sponsor can no longer impose a six-month suspension of employee contributions after a hardship withdrawal from a 403(b) plan.

Roth 403(b) Monies (if plan allows)

The plan administrator will determine whether the employee may receive a hardship withdrawal from their Roth 403(b) money type.  If the plan administrator allows hardship withdrawals from Roth 403(b) money type, the hardship recipient must indicate the amount that would like taken from pre-tax 403(b) and the Roth 403(b) money types.

Allowable amount of hardship withdrawal

Provided a member meets the hardship distribution criteria specified in the plan, a distribution for hardship is allowed if the following requirements are met:

  • The distribution does not exceed the amount of the need.
  • The member has tried other resources, including assets of member’s spouse and dependents.

If you have any questions about the hardship amendment or any other plan compliance topics, please call us at 1-800-279-4030, Extension 8579 or email WEAPlanAdmin@weabenefits.com.

Do you need to update employment status for your employees?

The end of the school year means retirements and terminations.  Updating employment status is quick and easy through the yourPlan Access portal.  If you are not already updating employee information through yourPLAN Access, we encourage you to reach out to Plan Administration at 1-800-279-4030 ext. 8579 or email at WEAPlanAdmin@weabenefits.com.  We know that you will find this to be a convenient and easy way to make employee updates.

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April 2022 articles

>>Protect your employees >>Changes to district approvals coming soon
>>Update on SECURE Act 2.0 >>Retirement Improvement and Savings Enhancement Act of 2021 (RISE Act)

Protect your employees

Make sure only appropriate Business Office personnel have access to yourPLAN ACCESS

yourPLAN ACCESS, the online employer access site for Member Benefits’ 403(b) plan, offers many options for obtaining information about your 403(b) plan—and this needs to be protected.

Who has access is just as important as the type of access that is given to the employee. There are two types of access:

  1. Full access provides access to the entire site and the ability to run reports and set up new accounts.
  2. Payroll only allows the user to enter and submit payroll rosters.

Member Benefits will be kicking off a campaign in late summer to reach out to Plan Sponsors and ask that they review their employees who have access to yourPLAN ACCESS. The communication will include a list of who has access and the type of access you have set up.

Contact the WEA Plan Administration team at 1-800-279-4030, Extension 8579 or email them at WEAPlanAdmin@weabenefits.com with any questions.

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Changes to district approvals coming soon

The pandemic has been challenging in so many ways but has also led to some efficiencies. One of those efficiencies is the wider acceptance of electronic signatures.

Member Benefits will be rolling out a new process for obtaining employer signatures. The initial rollout will be on exchange/transfer/rollover requests. This process requires a little bit of set up. Our staff will be reaching out to you for assistance in setting up the appropriate authorized signer. This project will be combined with the late summer campaign for yourPLAN ACCESS. You may also receive a phone call prior to this time.

Contact the WEA Plan Administration team at 1-800-279-4030, Extension 8579 or email them at WEAPlanAdmin@weabenefits.com with any questions.

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Update on SECURE Act 2.0

The Securing a Strong Retirement Act of 2021 (SECURE 2.0) is winding its way through various House and Senate committees. On March 29, 2022, it passed in the House of Representatives by a vote of 414 to 5. The U.S. Senate praised the House’s bipartisan vote and has pledged similar action in the upper chamber of Congress.

Below is a short recap of some of the subjects that are being considered and what may impact your plan. Please remember that not all discussion items will impact your plan.

  1. The required minimum distributions (RMD) start date may be pushed back from age 72 to age 73, then to age 74 starting in 2029 and age 75 in 2032.
  2. Employees between the ages of 62 and 64 may be able to contribute additional catch-up contributions up to $10,000. This is an increase from the current age 50 catch-up contribution of $6,500.
  3. The penalty for the failure to take RMDs may be reduced from 50% to 25%. In addition, if this failure is corrected in a timely manner, the penalty could be further reduced to 10%.
  4. Employers may be able to match employee student loan payments with contributions into a retirement savings plan.

It is important to remember that the proposed bill most likely will change and that not all these items may impact your 403(b) plan. We will continue to monitor SECURE Act 2.0 and communicate with you about possible changes that may impact your 403(b) plan.

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Retirement Improvement and Savings Enhancement Act of 2021 (RISE Act)

Below is a short recap of some of the subjects that are being considered and what may impact your plan. Please remember that not all discussion items will impact your plan.

  1. Retirement Savings Lost and Found would be an online searchable database managed by the Department of Labor. The database would be established by the Secretary of Labor and the Secretary of Treasury no later than two years from the enactment.
  2. The Retirement Plan Modernization Act would amend the cash-out limit from $5,000 to $7,000. Employers would be allowed to transfer employees’ retirement accounts out of the employer plan to an Individual Retirement Account (IRA) if their balance is between $1,000 and $7,000.
  3. Multiple Employer 403(b) Plans would enable 403(b) plans to participate in multiple employer plans (MEPs) and pooled employer plans (PEPs).
  4. Small Immediate Financial Incentives for Contributing to a Plan means a plan could offer a de minimis financial incentive to encourage participation. The example often given is a low-dollar gift card.
  5. The Pooled Employer Plans (PEP) Modification would define fiduciary responsibilities for collecting contributions in PEP and require a written contribution collection procedure.
  6. The Recovery of Retirement Plan Overpayment would clarify and improve the rules related to recouping overpayments to retirees to help plan sponsors and protect plan participants.

It is important to remember that the proposed bill most likely will change and that not all these items may impact your 403(b) plan. We will continue to monitor RISE Act and communicate with you about possible changes that may impact your 403(b) plan.

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January 2022 articles

>>Hardship amendment announcement >>SECURE Act and CARES Act Amendments coming soon
>>Annual notice requirements for 403(b) >>2022 contribution limits
>>Reminder of upcoming investment changest >>Join us at the Wisconsin State Education Convention

Hardship amendment announcement

WEA Member Benefits Plan Document Service

The hardship amendment was provided through the WEA Member Benefits plan document portal on December 2, 2019.  This communication is a review of the hardship distribution rule changes due to the upcoming hardship amendment deadline and is for informational purposes only. No action is required.

On December 31, 2021, 403(b) plan documents must include the hardship amendment. The changes to the hardship distribution rules for the 403(b) plans are a result of legislation in the Tax Cuts and Jobs Act of 2017 and the Bipartisan Budget Act of 2018 (the “BBA”). The Treasury Department also published proposed hardship distribution regulations in the Federal Register on November 14, 2018, and the final regulations on September 23, 2019. The amendment deadline was December 31, 2021, but the operational changes needed to comply with the new regulations as of January 1, 2020. 

WEA Member Benefits implemented the updated hardship distribution rules at various times based on the extent of the programming and procedural changes required to successfully implement each new rule.

New Hardship Distribution Events

  • Effective January 1, 2019, hardship distributions for expenses/losses related to federally declared disasters for participants living or working in federally declared disaster areas at the time of the disaster.
  • Under the new regulations, a hardship withdrawal can be taken to manage immediate and heavy losses/expenses due to a disaster declared by FEMA (the Federal Emergency Management Agency). This eliminates the delay and uncertainty of whether the disaster will be a hardship reason.
  • Also, effective January 1, 2019, hardship distributions for casualty losses according to the pre-2018 hardship rules, i.e., prior to the requirement that the participant live or work in a federally declared disaster area at the time of the loss. Casualty loss was clarified by the IRS in the Tax Act as an expense for repairing damage to primary residence. It does not need to be related to a federally declared disaster.

Elimination of Loan First Requirement

  • Effective April 2019, or the first day of the first plan year beginning in 2019 if later, the requirement to take all available non-taxable plan loans prior to taking a hardship distribution was eliminated.
  • Eliminating the loan requirement was optional in 2019 plan year but mandatory as of January 1, 2020.
  • All other available distributions must still be taken prior to taking a hardship distribution.

Elimination of the Six-Month Suspension Period

  • Effective April 2019, or the first day of the first plan year beginning in 2019 if later, the six-month suspension period for new hardship distributions was eliminated.
  • Eliminating the suspension was optional in the 2019 plan year but mandatory for hardship distributions on or after January 1, 2020.
  • The plan sponsor can no longer impose a six-month suspension of employee contributions after a hardship withdrawal from a 403(b) plan.

If you have any questions about the hardship amendment or any other plan compliance topics, please call us at 1-800-279-4030, Extension 8579 or email WEAPlanAdmin@weabenefits.com.

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SECURE Act and CARES Act Amendments coming soon

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) require Plan Sponsors to adopt them into their plans. We will be reaching out to districts that use WEA Member Benefits’ plan documents to assist you with incorporating these Acts into your district’s plan documents. Watch for email notifications and education opportunities starting in February 2022.

If you have any questions, contact Plan Administration at 1-800-279-4030, Extension 8579, or WEAPlanAdmin@weabenefits.com.

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Annual notice requirements for 403(b)

The Universal Availability Notice (UAN) and 415 Notice need to be provided annually. There is no date requirement; however, a common practice is to provide these documents with the W-2 distribution. The notices can be emailed, but a hard copy needs to be provided to employees who do not have access to email.

The UAN has two key components: opportunity and eligibility.

  • The UAN opportunity provides the employee with the frequency of when salary reduction agreements can be made or changed.
  • The UAN eligibility provides the details on which employees are permitted to make elective deferrals.

The 415 Notice provides employees with contribution limits and explains their responsibility for staying within those limits. It outlines the types of retirement accounts that are combined for that contribution limit.

If WEA Member Benefits is your document provider, an email was sent the week of January 3, 2022, with a link to the document portal. If you did not receive this link or have questions on the documents, please contact Plan Administration at 1-800-279-4030, Extension 8579, or WEAPlanAdmin@weabenefits.com.

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2022 contribution limits

Let your employees know that the employee contribution limit to a 403(b) account increased in 2022 to $20,500 (2021 limit $19,500). Those age 50 or over at the end of the calendar year can also make catch-up contributions of $6,500 beyond the basic limit on elective deferrals. If permitted by the 403(b) plan, an employee who has at least 15 years of service with the same eligible 403(b) employer may be able to contribute an additional $3,000.

The total contribution limit for both employee and employer contributions to 403(b) plans under section 415(c)(1)(A) increased from $58,000 to $61,000.

For more information on contribution limits in the 403(b) and IRA retirement savings programs, visit weabenefits.com/limits.

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Reminder of upcoming investment changes

A letter was sent to Plan Sponsors on January 7, 2022, to inform districts of the upcoming investment changes.  This is a reminder that the Vanguard Institutional Target Retirement funds will merge into the Vanguard Target Retirement Investor funds on February 11.  In addition, WEA Member Benefits will be replacing the T. Rowe Price Mid-Cap Growth fund with the ClearBridge Select Fund IS, which will occur during the week of March 7.

  • Please note that on February 9 at 8 a.m. CT, payroll processing will be unavailable and may not be restored until the end of the week of February 14 for the Vanguard merger.
  • And on March 2 at 8 a.m. CT, payroll processing will be unavailable and may not be restored until the end of the week of March 7 for the T. Rowe Price Mid-Cap Growth mutual fund change.

Please contact the Plan Administration team at 1-800-279-4030, Extension 8579, if you have any questions regarding payroll processing.

If you have questions regarding this fund change in the WEA TSA Trust 403(b) program, please contact a Retirement and Investment Services Specialist at 1-800-279-4030, Extension 8568.

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Join us at the Wisconsin State Education Convention

Join us at the Wisconsin State Education Convention, January 19-22, 2022, in the center of the Wisconsin Center arena at booth #525. And don’t miss our presentation, “Financial Wellness: It Starts with You and Benefits Employees,” Wednesday, January 19, 1:30pm in Room 202 A/B.

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October 2021 articles

>>Before sending in funds for your new employee, verify their 403(b) account is open >>Annual notices coming your way
>>Important information for Plan Sponsors that offer 403(b) loans >>Update on SECURE Act 2.0

Before sending in funds for your new employee, verify their 403(b) account is open

The start of the school year usually means new employees and an abundance of new hire paperwork. It can be easy to overlook an item. The enrollment into a 403(b) is a two-step process. A vendor application and a salary reduction agreement need to be completed. We are here to make the process easy for you and your employees.

A few ways to help your employees get started saving include:

  1. Setting up automatic enrollment into the 403(b) plan. Call your Worksite Benefits Consultant for more information.
  2. Utilizing the online Salary Reduction Agreement (SRA). Call your Worksite Benefits Consultant for more information.
  3. Providing your employees with 403(b) enrollment resources by accessing the new Retirement Savings and Enrollment Materials landing page that offers a quick way to access the new enrollment information for your employees.
  4. Providing employees with one or all of the following:

Annual notices coming your way

If your district offers automatic enrollment, the notice to employees needs to be distributed annually by December 1. WEA Member Benefits will be sending the automatic enrollment notices out in November. Please watch for the email and reach out if you have questions or do not receive the notice by November 17, 2021.

The Universal Availability Notice (UAN) and 415 Notice will be provided in January 2022 to school districts that use WEA Member Benefits as their document provider. In the past, these were sent in November with the automatic enrollment notices. The UAN and 415 Notices reflect current year information, so to ensure that 2022 information is captured they will now be sent in January. These notices need to be provided annually to employees but do not have a date requirement like the automatic enrollment notice.

Please contact Plan Administration at 800-279-4030, ext. 8579 or WEAPlanAdmin@weabenefits.com if you have any questions on these annual notices.

Important information for Plan Sponsors that offer 403(b) loans

The Plan Sponsor (school district) is responsible for reviewing their employee loan requests and making sure requests meet all the requirements of the plan.

To assist you with your loan request reviews, we are providing you with the WEA TSA Trust 403(b) program loan procedure. The following information contains important information about how an employee can apply for a loan from their WEA TSA Trust 403(b) account. It is important to review the loan procedures of all your vendors.

The following rules shall apply to the WEA TSA Trust loan program:

Procedure for Applying for a Loan

A loan applicant must be an active participant in a school district 403(b) plan whose plan document allows loans. The applicant (employer or third party administrator) must complete a WEA TSA Trust 403(b) Program Loan Application and submit the completed form and supporting materials to the plan administrator (employer or third party administrator). Loan applications may be obtained from the plan participant’s 403(b) vendor. All loan applications will be reviewed on a uniform and nondiscriminatory basis, and the loan will be approved if the plan administrator determines the employee has the ability to repay the loan, the loan is adequately secured, and the loan meets the other requirements set out below.

Administration of the Plan Loan Program

The WEA TSA Trust 403(b) loan program is administered by the plan administrator.

Promissory Note

If the WEA TSA Trust 403(b) loan is approved, the employee and plan administrator will be required to sign a promissory note.

Type and Amount of Loan

The WEA TSA Trust 403(b) loan program does not restrict the purposes for which loans may be made. However, the program does set maximum and minimum limits on the amount of a loan.

Maximum Amount of Loan

A loan cannot be greater than 50% of the vested account balance under the plan. Additionally, the loan cannot exceed $50,000 minus the difference between the highest outstanding balance of loans in the past 12 months and the outstanding balance of loans from the plan on the date the loan is made.

Roth 403(b) Monies (if plan allows)

The plan administrator will determine whether the employee may receive a loan from their Roth 403(b) money type. If the plan administrator allows loans from Roth 403(b) money type, the loan distribution is prorated between both pre-tax and Roth money types.

Repayment

Loans must be paid in equal payments over a period not extending beyond five years from the date of the loan.

If the employee goes on a leave of absence, they may be able to suspend loan repayments. Please refer your employee to contact their vendor to determine whether their leave of absence qualifies. A plan participant must repay a loan in accordance with the repayment schedule or they may make a full or partial prepayment.

Loan repayments shall be made each month. The employee may not refinance their loan. The loan will become payable in full upon the employee’s termination of employment unless they arrange to continue to make payments to their WEA TSA Trust 403(b) account outside of the plan.

Minimum Loan Amount

The minimum loan amount is $1,000.

Maximum Number of Loans

The maximum number of loans outstanding at any one time is one.

Interest Rate

According to U.S. Department of Labor Regulations, the interest rate for a participant loan from a retirement plan must be comparable to the current interest rates charged by financial institutions for similar loans. The interest rate that will apply on the loan will be as per vendor procedures. However, employees may qualify for a lower interest rate if they are on active duty in the military. An employee on active duty should contact their 403(b) vendor to determine whether they qualify for the lower interest rate.

Collateral

The employee’s vested account balance under the plan will serve as collateral for the loan. However, a maximum of 50% of their vested account balance may be used as collateral.

Repayment Process

Payments will be made through an ACH pull from the plan participant’s checking or savings account each month.

Fees

WEA TSA Trust charges a $200 processing fee. Any fee may be deducted from the proceeds of the loan and/or charged to their account.

Default

The loan will be in default if a scheduled payment is not made by the end of the “cure period.” The “cure period” is the repayment period allowed by the WEA TSA Trust 430(b) loan program, which will not extend beyond the last day of the calendar quarter following the calendar quarter during which the last scheduled installment payment was due and not paid. To fully understand the potential tax consequences in the event of a loan default, the employee is encouraged to seek professional tax advice before requesting a loan.

Coordination with Qualified Domestic Relations Orders (QDROs)

No loan will be approved if WEA TSA Trust is reviewing a QDRO that may affect the employee’s benefit under the plan.

Special Rules for Military Leave

If the employee is called into or volunteers for military service, special provisions may apply. The employee may request a loan suspension during their leave and choose from the following repayment methods upon their return to employment: (a) re-amortize the remaining loan balance; (b) repay all suspended loan payments at the end of their leave; or (c) continue payments under the prior rate and make a balloon payment at the end of the term. If the employee refinances the loan, they may extend the repayment period to the date that includes the latest date the loan repayment period could have been scheduled for (if the original term was less than five years) plus the period during which the loan was suspended. (See the note above regarding interest rates.)

Update on SECURE Act 2.0

The Securing a Strong Retirement Act of 2021 (SECURE 2.0) is winding its way through various House and Senate committees. It has bipartisan support but depending on Congress’ legislative priorities, it may or may not come up for floor votes by the end of 2021.

Below is a short recap of some of the subjects that are being considered and what may impact your plan. Please remember that not all discussion items will impact your plan.

  1. The required minimum distributions (RMD) required begin date may be pushed back from age 72 to age 75.
  2. Employees between the ages of 62 and 64 would be able to contribute additional catch-up contributions up to $10,000. This is an increase from the current age 50 catch-up contribution of $6,500.
  3. Automatic enrollment may be required at a savings rate of 3%, with an automatic annual increase until an employees’ contributions reach 10%.
  4. Employers may be able to match employee student loan payments with contributions into a retirement savings plan.

It is important to remember that the proposed bill mostly likely will change and that not all these items may impact your 403(b) plan. We will continue to monitor SECURE Act 2.0 and will communicate with you about any possible changes that may impact your 403(b) plan.

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