diff --git a/akka-javasdk-maven/akka-javasdk-parent/pom.xml b/akka-javasdk-maven/akka-javasdk-parent/pom.xml
index 8587f1039..950e52cfc 100644
--- a/akka-javasdk-maven/akka-javasdk-parent/pom.xml
+++ b/akka-javasdk-maven/akka-javasdk-parent/pom.xml
@@ -38,7 +38,7 @@
 
         <!-- These are dependent on runtime environment and cannot be customized by users -->
         <maven.compiler.release>21</maven.compiler.release>
-        <kalix-runtime.version>1.3.0-46b2781</kalix-runtime.version>
+        <kalix-runtime.version>1.3.0-940b627</kalix-runtime.version>
 
         <project.build.sourceEncoding>UTF-8</project.build.sourceEncoding>
         <skip.docker>false</skip.docker>
diff --git a/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerEffectImpl.scala b/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerEffectImpl.scala
index 0b5da20fb..725fef4ad 100644
--- a/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerEffectImpl.scala
+++ b/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerEffectImpl.scala
@@ -20,17 +20,11 @@ import akka.javasdk.consumer.Consumer
 private[impl] object ConsumerEffectImpl {
   sealed abstract class PrimaryEffect extends Consumer.Effect {}
 
-  final case class ProduceEffect[T](msg: T, metadata: Option[Metadata]) extends PrimaryEffect {
-    def isEmpty: Boolean = false
-  }
+  final case class ProduceEffect[T](msg: T, metadata: Option[Metadata]) extends PrimaryEffect {}
 
-  final case class AsyncEffect(effect: Future[Consumer.Effect]) extends PrimaryEffect {
-    def isEmpty: Boolean = false
-  }
+  case object ConsumedEffect extends PrimaryEffect {}
 
-  case object IgnoreEffect extends PrimaryEffect {
-    def isEmpty: Boolean = true
-  }
+  final case class AsyncEffect(effect: Future[Consumer.Effect]) extends PrimaryEffect {}
 
   object Builder extends Consumer.Effect.Builder {
     def produce[S](message: S): Consumer.Effect = ProduceEffect(message, None)
@@ -40,18 +34,21 @@ private[impl] object ConsumerEffectImpl {
 
     def asyncProduce[S](futureMessage: CompletionStage[S]): Consumer.Effect =
       asyncProduce(futureMessage, Metadata.EMPTY)
+
     def asyncProduce[S](futureMessage: CompletionStage[S], metadata: Metadata): Consumer.Effect =
       AsyncEffect(futureMessage.asScala.map(s => Builder.produce[S](s, metadata))(ExecutionContext.parasitic))
+
     def asyncEffect(futureEffect: CompletionStage[Consumer.Effect]): Consumer.Effect =
       AsyncEffect(futureEffect.asScala)
+
     def ignore(): Consumer.Effect =
-      IgnoreEffect
+      ConsumedEffect
 
     override def done(): Consumer.Effect =
-      ProduceEffect(Done, None)
+      ConsumedEffect
 
     override def asyncDone(futureMessage: CompletionStage[Done]): Consumer.Effect =
-      AsyncEffect(futureMessage.asScala.map(done => Builder.produce(done))(ExecutionContext.parasitic))
+      AsyncEffect(futureMessage.asScala.map(_ => this.done())(ExecutionContext.parasitic))
   }
 
   def builder(): Consumer.Effect.Builder = Builder
diff --git a/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerImpl.scala b/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerImpl.scala
index f03048ca7..409d36ddc 100644
--- a/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerImpl.scala
+++ b/akka-javasdk/src/main/scala/akka/javasdk/impl/consumer/ConsumerImpl.scala
@@ -10,7 +10,6 @@ import scala.concurrent.ExecutionContext
 import scala.concurrent.Future
 import scala.util.control.NonFatal
 
-import akka.Done
 import akka.actor.ActorSystem
 import akka.annotation.InternalApi
 import akka.javasdk.Metadata
@@ -24,7 +23,7 @@ import akka.javasdk.impl.ComponentType
 import akka.javasdk.impl.ErrorHandling
 import akka.javasdk.impl.MetadataImpl
 import akka.javasdk.impl.consumer.ConsumerEffectImpl.AsyncEffect
-import akka.javasdk.impl.consumer.ConsumerEffectImpl.IgnoreEffect
+import akka.javasdk.impl.consumer.ConsumerEffectImpl.ConsumedEffect
 import akka.javasdk.impl.consumer.ConsumerEffectImpl.ProduceEffect
 import akka.javasdk.impl.serialization.JsonSerializer
 import akka.javasdk.impl.telemetry.ConsumerCategory
@@ -101,11 +100,7 @@ private[impl] final class ConsumerImpl[C <: Consumer](
 
   private def toSpiEffect(message: Message, effect: Consumer.Effect): Future[Effect] = {
     effect match {
-      case ProduceEffect(msg: Done, metadata) =>
-        Future.successful(
-          new SpiConsumer.ProduceEffect(
-            payload = Some(serializer.toBytes(msg)),
-            metadata = MetadataImpl.toSpi(metadata)))
+      case ConsumedEffect => Future.successful(SpiConsumer.ConsumedEffect)
       case ProduceEffect(msg, metadata) =>
         if (consumerDestination.isEmpty) {
           val baseMsg = s"Consumer [$componentId] produced a message but no destination is defined."
@@ -123,8 +118,6 @@ private[impl] final class ConsumerImpl[C <: Consumer](
           .recover { case NonFatal(ex) =>
             handleUnexpectedException(message, ex)
           }
-      case IgnoreEffect =>
-        Future.successful(SpiConsumer.IgnoreEffect)
       case unknown =>
         throw new IllegalArgumentException(s"Unknown TimedAction.Effect type ${unknown.getClass}")
     }
diff --git a/akka-javasdk/src/main/scala/akka/javasdk/impl/workflow/WorkflowImpl.scala b/akka-javasdk/src/main/scala/akka/javasdk/impl/workflow/WorkflowImpl.scala
index 6de408ba5..a246e1729 100644
--- a/akka-javasdk/src/main/scala/akka/javasdk/impl/workflow/WorkflowImpl.scala
+++ b/akka-javasdk/src/main/scala/akka/javasdk/impl/workflow/WorkflowImpl.scala
@@ -105,16 +105,12 @@ class WorkflowImpl[S, W <: Workflow[S]](
     val failoverRecoverStrategy = definition.getStepRecoverStrategy.toScala.map(toRecovery)
     val stepTimeout = definition.getStepTimeout.toScala.map(_.toScala)
 
-    val defaultStepConfig = Option.when(failoverRecoverStrategy.isDefined) {
-      new SpiWorkflow.StepConfig("", stepTimeout, failoverRecoverStrategy)
-    }
-
     new SpiWorkflow.WorkflowConfig(
       workflowTimeout = definition.getWorkflowTimeout.toScala.map(_.toScala),
       failoverTo = failoverTo,
       failoverRecoverStrategy = failoverRecoverStrategy,
       defaultStepTimeout = stepTimeout,
-      defaultStepConfig = defaultStepConfig,
+      defaultStepRecoverStrategy = failoverRecoverStrategy,
       stepConfigs = stepConfigs)
   }
 
diff --git a/project/Dependencies.scala b/project/Dependencies.scala
index ccf18e709..115dc0012 100644
--- a/project/Dependencies.scala
+++ b/project/Dependencies.scala
@@ -8,7 +8,7 @@ object Dependencies {
     val ProtocolVersionMinor = 1
     val RuntimeImage = "gcr.io/kalix-public/kalix-runtime"
     // Remember to bump kalix-runtime.version in akka-javasdk-maven/akka-javasdk-parent if bumping this
-    val RuntimeVersion = sys.props.getOrElse("kalix-runtime.version", "1.3.0-46b2781")
+    val RuntimeVersion = sys.props.getOrElse("kalix-runtime.version", "1.3.0-940b627")
   }
   // NOTE: embedded SDK should have the AkkaVersion aligned, when updating RuntimeVersion, make sure to check
   // if AkkaVersion and AkkaHttpVersion are aligned