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Retirement security is a fundamental part of the American Dream. For generations, workers have contributed to different types of retirement accounts with the expectation that these programs will be there for them when they retire. They're excellent tools for building retirement income, and you've probably been watching yours closely. But what does SECURE 2.0 - Congress' most discussed retirement agenda - have in store for you? And what are the potential reforms and other effects of it that you must prepare for?

Let us answer all your questions and draw up the best retirement for you.

What is Secure 2.0?

The Securing a Strong Retirement Act of 2022 (affectionately referred to as SECURE 2.0 due to the fact that it builds upon the SECURE Act of 2019) is a set of legislative proposals to improve retirement security in the United States. Such improvements would be reflected in 401(k)s, 403(b)s, and retirement savings accounts.

However, there are two versions of SECURE 2.0 – the House version and the Senate version. The House version passed with overwhelming bipartisan support on March 29th of this year. In June, the Senate effectively did the same by voting unanimously to move related legislation forward in two of its committees. This is significant because if the SECURE Act 2.0 is to ever get the OK from Congress and be made law, the Senate and the House will be forced to iron out the differences between their two into one cohesive set of legislation.

What Are the SECURE Act 2.0 Retirement Reforms?

The related legislation the Senate Finance Committee has approved, thereby effectively floating SECURE 2.0 along with it, is a set of proposed reforms to the US retirement system. Here are the possible reforms you should know about:

• Increased credits for small businesses
• Automatic enrollment in plans
• Expanded saver's credit
• Generous catch-up limit
• Access to retirement plans for part-time workers
• Increased required minimum distribution age
• Enhanced 403(b)
• Student loan payments as elective deferrals

The highlight of these changes is raising catch-up contribution limits. The catch-up contribution provisions would increase from $6,500 to $10,000 for savers ages 62-64. The proposals also call for treating the catch-ups as post-tax. This means your catch-ups will no longer be pre-tax contributions.

How Will the Retirement Reforms Affect You?

The retirement reforms might have a significant impact on your retirement savings. Here’s some of what you need to know about the potential changes coming down the pipeline:

The proposed changes will make it easier for you to save for retirement by getting automatically enrolled in your employer's retirement plan. The automatic enrollment will help more workers save for retirement, especially those who are just starting their careers.

The retirement reforms will also expand the saver's credit, which is a tax credit for low- and moderate-income workers who contribute to retirement accounts.

The proposed changes will raise the required minimum distribution (RMD) age even further. The original SECURE Act in 2019 increased the age from 70.5 to 72 for RMDs. Due to changes made by the original SECURE Act in 2019, if your 70th birthday was July 1, 2019, or later, you do not have to take withdrawals until you reach age 72. The SECURE Act 2.0 proposes increasing the threshold to age 73 next year, and eventually to age 75. This means you can delay taking distributions from your retirement accounts and let your money grow for longer.

The retirement reforms will make it easier for part-time workers to save for retirement by allowing them to participate in their employer's retirement plan.

Knowing what to expect once the SECURE 2.0 retirement reforms become law is vital. These changes will significantly impact your retirement savings, and your retirement planning should account for these changes.

Now that you have a preview of what's coming, you can start preparing for the SECURE 2.0 retirement reforms. After all, retirement is something you're planning for your entire life. Your years of hard work deserve a secure and comfortable retirement, and SECURE 2.0 is designed to help get you there.

Watch for part two of this 2-part GJM blog series on SECURE 2.0, when we’ll take a closer look at the impact on businesses and their retirement plans.

GJM’s Molly Wolf contributed this article. Molly has over 15 years of experience specializing in employee benefit plans and is an affiliate member of the American Society of Pension professionals & Actuaries (ASPPA). She consults with clients on benefit plan design, compliance testing, payroll integration and reconciliation. She also serves as a third-party plan administrator.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.  

A lot is going on with SECURE 2.0, a pending piece of legislation built on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The goal of the bill is to substantially boost the retirement savings of Americans. SECURE 2.0 contains numerous provisions that, if enacted, would affect individuals, employers, and small business owners.

SECURE 2.0 has provisions that bring several important implications for small businesses and would impact their retirement benefits programs, once the pending legislation is passed. These include expanded worker eligibility, automatic plan enrollment, and others. Not to mention the increase in the number of employees your post-employment benefit plan covers.

Sounds like a lot of work, right?

You need not worry.

SECURE 2.0 is designed with small businesses in mind. It will create new tax credits that are specifically designed to help employers.

This blog, the second in our two-part series on SECURE 2.0, post will explore two important and relevant points:

Increased Retirement Plan Start-Up Credit

One of the most significant changes in the retirement law is expanded tax benefits. SECURE 2.0 will double the tax credit for companies starting a retirement plan. Currently, the three-year credit is available for 50% of the qualified startup costs. This is for businesses employing no more than 100 employees.

100% Qualified Start-Up Costs

Eligible small businesses with 100 or fewer workers can claim a credit for 50% of their qualified start-up costs. Effective for tax years starting after 2022, Secure 2.0 would increase it to 100% for employers with 50 or fewer employees.

New Tax Credit

Businesses would also receive a new tax credit. This is a percentage of the employer contribution on behalf of employees, with a per-employer cap of $1,000. This is, however, limited to businesses with 50 employees or less. It will gradually phase out for companies with employees between 51 and 100.

From Less Than 100 to Only 50 Employees

While SECURE 2.0 contains provisions aimed at helping small businesses, it would also bring them some changes that will have negative impacts. In particular, these would be small businesses with 51 to 100 employees.

Because of the stated provisions in the bill, small businesses employing more than 50 individuals cannot take advantage of the total tax credit. Rather, the percentage will gradually phase out as the number of employees increases, as mentioned above.

On the whole, the aim of SECURE 2.0 is to help employers in the U.S. to encourage workers to plan for their retirement. If you are a business owner, the provisions in the bill will definitely impact your business once it’s enacted. This is regardless of whether you’re considering starting a new retirement plan or if you’re already offering one.  

If you’re interested in learning more about whether your small business qualifies for the retirement plan startup Tax Credit, you can learn more here.

An Important Note for the Remainder of 2022

If a plan wants to adopt a new safe harbor 401(k) plan in 2022, the employer needs to adopt that new plan by October 1, 2022 (if the business has a calendar year-end). For a traditional 401 (k) plan, the deadline is based on the employer’s tax status, as shown in the list below:

• S-Corporation (or LLC taxed as S-Corp): March 15 with extension Sept 15, 2023
• Partnership (or LLC taxed as a partnership): March 15 with extension Sept 15, 2023
• C-Corporation (or LLC taxed as C-Corp): April 15 with extension Oct 15, 2023
• Sole Proprietorship (or LLC taxed as sole proprietorship): April 15 with extension Oct 15, 2023

Part one of this 2-part GJM blog series on SECURE 2.0 outlines the changes that may be coming for individuals and how we save for retirement.

GJM’s Molly Wolf contributed this article. Molly has over 15 years of experience specializing in employee benefit plans and is an affiliate member of the American Society of Pension Professionals & Actuaries (ASPPA). She consults with clients on benefit plan design, compliance testing, payroll integration and reconciliation. She also serves as a third-party plan administrator.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.

"We don't have data others would want." 

I hear that statement quite often from executives and business owners regardless of size or industry. It typically prompts several questions from me.

• How do you know?  
• What steps have you taken to understand your data? 
• What information is important to you or your competitors? 
• What information would be most damaging to your business if it became public? 
• How do you plan to stop someone from stealing your data?

While many of the reported stories of data breaches involve large, well-known companies such as Target, Barnes & Noble, Nortel, Nissan, and others, in the world of cyber-crime size doesn’t matter – only information does. Just because a breach isn’t splashed in the headlines doesn’t mean it isn’t happening. Companies large and small across the country and our region deal with this every day and the reality is that your business could be next. One company’s Internet footprint looks the same as another to anyone interested in finding something of value, whether it’s credit information, personnel information, intellectual property such as engineering drawings or processes, technology or other industrial assets.

Cybersecurity has moved to a business imperative that is enabled by IT. No longer is this just an IT issue keeping your CIO up at night. Many boards are finely tuned in to what is going on around the world related to cybersecurity. Executive leadership is increasingly being held accountable for protecting the company’s information assets. Regulators have continued to up their cyber game and pay closer attention to how a company’s information security program could impact the going concern of a business.

A strong information security program can facilitate business growth, create market advantages, and build brand trust. Data privacy and trust have become critical business requirements as exponentially more consumer and business information is generated and shared with your partners. 

What can your company do now?

Your IT team may not have the cybersecurity expertise or the time it takes to monitor cybersecurity threats 24/7. Day to day, the IT team is often focused on supporting the business and projects that drive revenue.

Cybersecurity is everyone's business—including C-level executives, managers, administrative assistants, and even part-time office staff.  Unfortunately, any employee can be a potential cybersecurity attack vector, and cyber breaches don't always come from the outside. You can put all the right traditional cybersecurity measures in place, but all it takes is one employee clicking on a phishing email.

Understanding your organization's cybersecurity maturity, knowing where there may be gaps, and addressing those issues is imperative. Taking proactive steps to mitigate cybersecurity risk can mean the difference between a data breach or business as usual.

GJM’s customized cybersecurity assessment provides you with a high-level view of your organization’s cybersecurity maturity, determines your risk exposure, provides advice on potential process gaps, and helps guide you to realistic action plans.

Rapid Assessment includes:

• Best practices for cybersecurity controls, based on successful strategies from well-known security and compliance frameworks
• Identification of potentially critical security issues
• Actionable, quick-fix opportunities to improve security
• Outline of recommendations and roadmap for remediation
• Guidance for ongoing improvement of the organization’s security 

When it comes to your data, there is no single magic bullet that can protect you from every scenario. But you can improve your overall security posture by taking a closer look at your internal practices. Cybersecurity rapid assessments do more than analyze threats – they help you neutralize threats before they compromise your business. Today, it’s vital that every small to medium-sized business conduct a cybersecurity rapid assessment to ensure that its security is keeping its business, network, and data safe, preventing cyber threats, and meeting regulatory guidelines. If you are interested in learning more about GJM’s cyber risk services, please contact Matt Hoverman at mhoverman@gjmltd.com. 

Matt Hoverman, CISA contributed this article. Matt is a partner with Gilmore Jasion Mahler, LTD and leads the firm’s Risk Advisory practice. He has spent his entire career helping companies of all sizes understand the impact of technology on their business.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.

Technology has led to the development of new accounting tools and approaches that have revolutionized how businesses operate. As a result, the outsourced accounting landscape in 2023 looks promising.

Many businesses have transitioned to cloud-based accounting systems and integrated finance software to manage their books. With many new companies opening and remote work rising, there’s been a tremendous increase in demand for outsourced accounting services.

But with the influx of new accounting service providers in the market, it has become difficult for businesses to choose the right one to fit their needs. Here are five essential tips on choosing the right provider for your business.

#1: Decide What You Need from an Outsourced Accounting Provider

Before you start your search for the right provider, you must first identify what you're looking for in a provider. What type of accounting services do you need? What level of expertise do you require? Do you need a full-service provider or just specific services?

Answering these questions will help you narrow down your search and make it easier to find a provider that meets your specific requirements.

#2: Assess Your Current Accounting Process and Needs

You also need to look closely at your current accounting processes and needs. This will help you understand what areas need improvement and what services you need from a provider.

You should also assess your company's growth plans and decide if you need a provider that can scale with your business. This is important because your accounting needs will change as your business grows.

#3: Research Different Outsourced Accounting Providers 

Once you know what you want and need from a provider, it's time to start your research. There are several ways to do this. You can start by reading online reviews and comparing different providers.

Even more important, ask for recommendations from close business relationships. There’s nothing more valuable than a reference from someone you trust. You can also consult with your current accountant, who may or may not be able to provide these specialized services. Once you have a list of potential providers, you can contact them to get more information.

#4: Interview Potential Outsourced Accounting Providers 

After your research, it's time to start interviewing potential providers. This is crucial because it will help you understand the provider's services, experience, expertise, and approach.

During the interview, you should keep these goals in mind:

• Find out what tools and processes they use
• Check online reviews and testimonials
• Get a sense of their customer service
• Learn about other services they offer

#5: Make a Decision and Implement the New Provider

After you've interviewed different providers and gathered all the information you can, you're ready to decide. Choose the provider that you feel is the best fit for your business and budget.

Once you've decided, it's time to implement the new provider. Make sure to create a plan for how you'll transition and communicate with your team to minimize disruptions to your business and ensure a smooth transition.

The Bottom Line

Choosing the right outsourced accounting provider is a vital decision for any business. By assessing your needs, researching different providers, and interviewing potential providers, you can find the right partner to fit your specific needs and requirements.

GJM outsourced accounting services offer a wide range of specialty services for businesses interested in handing over the accounting function to a provider and advisor they can trust.

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Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business & transaction advisory, healthcare management & advisory, outsourced accounting, and risk advisory. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution, nonprofit, private equity and utilities.

The owner of any business that offers a retirement plan understands there’s a great deal of work associated with proper administration of the plan. Rather than trying to manage the plan internally, many businesses turn to a third-party administrator (or TPA). The number one job of a TPA is to ensure the accuracy and continued compliance of your retirement plan. The U.S. Department of Labor regulations can be confusing and mandatory compliance testing can quickly become complicated. If not performed correctly, lack of proper compliance could cost the plan a great deal of money in penalties. A TPA’s role is to review plan documents and confirm the plan is following and meeting those critical required government compliance standards. Perhaps most importantly, the right TPA in place can remove these concerns from the business owner or manager and offer the reassurance of ongoing compliance.

Considering a TPA?  

If your business is considering bringing on a TPA, be sure you clearly understand your needs before selecting a service provider. Making the right choice will save your business potential headaches down the road. In this article we’ll offer three helpful suggestions for finding the right TPA for your unique business needs.

Choose someone who understands your industry. Each industry is different, from industrywide regulations to practices very specific to your business. You will benefit from working with a TPA who understands your area of specialization.

GJM Benefit Plan Services Specialist Molly Wolf agrees that industry knowledge is invaluable. She services benefit plans across many industries, including healthcare.

“I happen to do quite a bit of work for healthcare entities: physician practices, dental practices and other health facilities. The more work you do in a specialized industry,” she says, “the more knowledge you gain, and clearer understanding you have of industry specific compliance standards. That knowledge has served me very well as I service my healthcare clients.”

Make sure you work well together. Communication is everything. Think of your TPA as a member of your extended team and keep the communication lines open. Regulations can change. Your needs can change. Be sure you’re on the same page. If you’re communicating with your TPA and not seeing the type of responsiveness you need, it may be time to consider another provider. Consider establishing a point person within your business to work directly with your TPA. Typically, that will be your Human Resources Director.

Understand the value of experience. Your TPA should have solid experience and knowledge. Make sure the provider is familiar with the different types of retirement plans, clearly understands product offerings and can help you select the best benefit plan for your needs and the needs of your employees. The ideal TPA is also engaged with continuing education to stay abreast of changes in compliance requirements.

Our Expertise

Retirement Plan Services at GJM include:

• Benefit plan audits
• Retirement consulting
• Preparation and filing of related retirement tax forms
• Retirement Plan Third Party Administration (TPA)
  • Required compliance testing
  • Preparation of plan documents, restatement, and amendments
  • Reconciliation of each individual participant account
  • Preparation of annual and quarterly notices

GJM’s benefit plan administration specialist team works with businesses with varying needs. Here’s just some of what you can expect:

• Lower administrative burden
• Ability to make recommendations and provide practical solutions
• Assistance with plan corrections
• Intimate knowledge of your plan and business
• Ability to work with your current providers including advisors/brokers, investment companies, record-keepers, and payroll services
• New plan start-up
• Assist with determining participant eligibility
• Compliance testing
• Employer contribution projections
• Annual and quarterly notices
• Processing and reconciliation of participant loans
• Processing of distributions
• Preparation of Form 1099-R and 945
• Vesting
• Preparation and filing of Form 5500 and Form 8955-SSA

If you think your business could benefit from GJM’s specialized Benefit Plan Administration Services, reach out to your GJM team to start the discussion.

Molly Wolf is an accounting services manager with over 15 years of experience specializing in employee benefit plans. The first 9 years of her career were spent as a dedicated employee benefit plan auditor. Her expertise also includes consulting for third-party plan administration and benefit plan design, compliance testing, payroll integration and reconciliation. Since joining Gilmore Jasion Mahler in September of 2019, Molly has continued to provide third-party administration services, prepares related tax forms, consults on plan design, and prepares plan documents. She is a graduate of Bowling Green State University with a Bachelor of Science in business administration with accounting specialization.

Established in 1996, Gilmore Jasion Mahler, LTD (GJM) is the largest public accounting firm in Northwest Ohio, with offices in Maumee and Findlay. Locally owned, GJM offers cloud-based accounting and provides comprehensive services including assurance, business advisory, tax, risk advisory, healthcare management and outsourced accounting. The firm’s professionals specialize in industries including construction & real estate, healthcare, manufacturing & distribution and utilities.