Late December 2022, President Biden signed into law the Secure Act 2.0 as part of the Consolidated Appropriations Act of 2023. Secure 2.0 is aimed to help people save and invest for a more secure retirement. The law has many provisions spanning most retirement saving options: defined contribution plans, defined benefit plans, IRAs and more. Some of the new provisions take effect in 2023, while most others will take effect in 2024 and beyond.
We are actively reviewing the new law to determine its impact on the all of UC’s Retirement plans – 403(b), 457(b), DC Plan and Pension Plan – and will provide updates throughout the year.
For now, we are happy to report three immediate benefits of the new law.
New Rules that Impact UC 457(b) Plan Contribution Timing
UC's 457(b) plan will process contributions in the same manner as the UC 403(b) Plan and the DC Plan (after-tax). This means that, beginning in April 2023, contributions (including new deferrals, changes to deferrals and cancellations) in the UC 457(b) Plan will take effect with the next available paycheck (subject to payroll cut-off dates).
Required Minimum Distribution (RMD) Age Increase
- The RMD (also known as a minimum required distribution, or MRD) age increases from 72 in 2022 to 73 in 2023, and to 75 in 2033.
- RMD rules apply to all UC voluntary plans – 403(b), 457(b) and DC Plan, as well as the UC Retirement Plan.
- Find out more about RMDs.
QLAC Maximum Purchase Increase
- A QLAC (Qualifying Longevity Annuity Contract) is a special type of annuity that helps guarantee income for life in retirement. The new maximum purchase amount for QLACs is $200,000.
- UC offers a QLAC called, Deferred Lifetime Income, only for participants in the UC Retirement Savings Program (UC RSP). This means that eligible UC RSP participants can now purchase up to $200,000 in Deferred Lifetime Income and start receiving monthly payments for life starting at age 78.
- Find out more about Deferred Lifetime Income, including age and other requirements.