Retirement Legislation Awaits Further Action for Tesla Employees

Legislation that could benefit Tesla employees and retirees with individual retirement accounts (IRAs) and retirement plans such as employees in Tesla companies, is currently moving through Congress. The Securing a Strong Retirement Act of 2022 has passed almost unanimously in the House. A similar bill (with some differences), the Enhancing American Retirement Now Act, has been drafted in the Senate but will have to wait until Congress is back in session in November for further consideration. If the Senate passes its bill, the House and the Senate would need to reconcile the two bills, and then each would vote on the reconciled bill.

Some significant provisions in the proposed legislation that may aid in your Tesla retirement planning are summarized below.

Contributions
House	Senate
The $1,000 IRA catch-up contribution limit for individuals aged 50 and older would be indexed for inflation, starting in 2024.	The $1,000 IRA catch-up contribution limit for individuals aged 50 and older would be indexed for inflation, starting in 2023.
For workplace retirement plans such as a 401(k), the catch-up contribution limit would be increased to $10,000 (indexed for inflation) for eligible participants aged 62 to 64, starting in 2024.	For workplace retirement plans such as a 401(k), the catch-up contribution limit would be increased to $10,000 (indexed for inflation) for eligible participants aged 60 to 63, starting in 2025.

For SIMPLE plans, the catch-up contribution limit would be increased to $5,000 (indexed for inflation) for eligible participants aged 62 to 64, starting in 2024. For SIMPLE plans, the catch-up contribution limit would be increased to $5,000 (indexed for inflation) for eligible participants aged 60 to 63, starting in 2025. An employer would be able to make matching contributions to a defined contribution plan such as a 401(k) on behalf of an employee who is making qualified student loan payments, starting in 2023. An employer would be able to make matching contributions to a defined contribution plan such as a 401(k) on behalf of an employee who is making qualified student loan payments, starting in 2024.

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Distributions
House	Senate
The current starting age of 72 for required minimum distributions (RMDs) from retirement accounts would be increased to age 73 starting in 2023, age 74 starting in 2030, and age 75 starting in 2033.	The current starting age of 72 for required minimum distributions (RMDs) from retirement accounts would be increased to age 75 for calendar years after 2031.
The penalty for failing to make an RMD would be reduced from 50% to 25%, starting in 2023. In addition, the penalty would be reduced to 10% if the taxpayer corrects an RMD shortfall and submits a corrected tax return before the earlier of (a) when the IRS demands payment or (b) the end of the second taxable year after the taxable year in which the penalty is imposed.	The penalty for failing to make an RMD would be reduced from 50% to 25%, starting in 2023. In addition, the penalty would be reduced to 10% if the taxpayer corrects an RMD shortfall and submits a corrected tax return before the earlier of (a) when the IRS demands payment or (b) the end of the second taxable year after the taxable year in which the penalty is imposed.
Qualified charitable distributions (QCDs) for individuals aged 70½ and older would be expanded to allow a one-time election to be made for a QCD of up to $50,000 (to be adjusted for inflation) to a charitable remainder unitrust, a charitable remainder annuity trust, or a charitable gift annuity.	Qualified charitable distributions (QCDs) for individuals aged 70½ and older would be expanded to allow a one-time election to be made for a QCD of up to $50,000 (to be adjusted for inflation) to a charitable remainder unitrust, a charitable remainder annuity trust, or a charitable gift annuity.
An exception to the penalty for early distributions from a retirement plan would be available for up to $10,000 of distributions to a domestic abuse victim after the date of enactment.	An exception to the penalty for early distributions from a retirement plan would be available for up to $10,000 of distributions to a domestic abuse victim after the date of enactment.

Other
House	Senate
SIMPLE and SEP Roth IRAs would be allowed starting in 2023.	SIMPLE and SEP Roth IRAs would be allowed starting in 2024.
If a retirement plan permits it, an employee would be able to elect to have employer-matching contributions treated as Roth contributions, starting with contributions made after the date of enactment.	If a retirement plan permits it, an employee would be able to elect to have employer-matching contributions treated as Roth contributions, starting with contributions made in 2023.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Restructuring and Layoffs: Tesla planned to lay off 10% of its workforce (around 14,000 employees) in 2024 due to slowing sales and economic pressures. The layoffs primarily affected salaried employees. Company Benefit Changes: Severance packages and support for affected employees were provided. Tesla continues to invest in expanding its Gigafactories and enhancing its Full Self-Driving service. (Sources: Markets Insider, Engadget)

Tesla offers stock options (SOs) and Restricted Stock Units (RSUs). SOs allow employees to purchase stock at a fixed price after vesting. RSUs vest over four years. In 2022, Tesla emphasized performance-based RSUs. In 2023, Tesla continued with RSUs as the primary equity compensation. By 2024, Tesla expanded RSU programs. Executives, management, and broader employees are eligible. [Source: Electrek; Tesla Motors Club; Tesla Annual Report 2023, p. 50]

Tesla offers a comprehensive healthcare benefits package designed to meet the diverse needs of its employees. For 2023, Tesla provided various health insurance options, including high-deductible health plans (HDHPs) with Health Savings Accounts (HSAs), covering a wide range of medical, dental, and vision services. Employees benefit from free Aetna medical insurance, Delta Dental, and VSP vision coverage. The company also emphasizes mental health, offering resources like counseling services and wellness programs aimed at promoting overall well-being. In 2024, Tesla continues to enhance its benefits package with a focus on holistic employee wellness. The company offers comprehensive support for family building, including fertility benefits and parental leave. Tesla also provides fitness perks such as on-site gyms and fitness classes. These enhancements are particularly important in the current economic and political climate, where healthcare affordability and accessibility are significant concerns. By continuously updating its benefits, Tesla ensures its employees are well-supported, fostering a healthy and productive work environment.