DALLAS — Legislation signed into law in December 2015 will have a positive impact for both those who participate in and those who operate church retirement plans. Provisions of the Protecting Americans from Tax Hikes (PATH) Act of 2015 will allow church retirement plans to include automatic enrollment features regardless of state wage withholding laws, as well as allow for certain kinds of transfers and mergers between accounts of the same employer.
Among certain church-related employers, provisions will help distinguish between different kinds of church and denominational governance structures — which will address the issue of counting employees for benefit purposes.
The legislation took three Congresses to consider before being tacked onto the PATH Act. President Barack Obama signed the bill into law Dec. 18, 2015.
A major “win” in this new legislation is leveling the playing field between secular employers’ plans and church-related employers’ plans when it comes to offering automatic enrollment plans. Among the provisions in the law is a component that pre-empts any state law that interferes with the ability of a church plan to offer automatic enrollment programs. Under automatic enrollment programs, employees automatically enroll in the retirement plans at a preset level of deferrals but employees have the option to opt out or make changes to the amount deferred.
(GuideStone)
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