What You Need to Know About SECURE 2.0

Automatic Enrollment for New 401(k)/403(b) Plans (now in effect)

Since 2025, most plans established after 12/28/2022 must use automatic enrollment: default deferral 3–10% with automatic escalation 1% per year up to 10–15%. Churches, governments, small/new businesses, and SIMPLE plans are exempt. If your plan was adopted after 2022 and isn’t auto-enrolling yet, this needs attention now.

Required Minimum Distributions (RMDs)

• RMD age increased to 73 (for 2023+) and to 75 in 2033.
• Roth accounts in employer plans no longer subject to pre-death RMDs (2024+).

Catch‑Up Contributions

• Age 50+ catch‑up: $8,000 for 2026 (up from $7,500).
• Ages 60–63 “super catch‑up”: $11,250 for 2026.
• Mandatory Roth catch‑ups are now in effect (2026): employees who earned more than $150,000 in FICA wages from their employer in the prior year must make catch‑up contributions on a Roth basis. Final IRS regulations were issued September 2025, with good‑faith compliance expected through 2026.
• Plans that don’t offer Roth contributions cannot accept catch‑ups from affected high earners—and related plan amendments are generally due by December 31, 2026.

Student Loan “Match” (2024+)

Plans may treat qualified student loan payments as elective deferrals for the purpose of employer matching contributions—helpful for employees who can’t afford to defer.

Long‑Term, Part‑Time Employees

Beginning in 2025, employees working at least 500 hours in 2 consecutive years must be allowed to make salary deferrals (down from 3 years under the original SECURE Act). Employers may still exclude these employees from most testing and employer contributions.

Emergency Access Options

• $1,000 personal emergency distribution per year (repayable over 3 years; limited protections from 10% penalty).
• Pension‑linked emergency savings accounts (PLESAs): optional sidecar after‑tax savings up to $2,500 with special withdrawal rules.

Roth, SEP & SIMPLE Enhancements

Employers may offer Roth versions of SEP and SIMPLE IRAs. Plans can allow employer matching and nonelective contributions to be made on a Roth basis (taxable when contributed).

Small Employer & Start‑Up Credits

Enhanced tax credits can offset a significant portion of administrative costs and employer contributions for small employers starting new plans.

“Starter” 401(k)/403(b) Plans

A simplified deferral‑only plan type with auto‑enrollment and lower administrative burden, aimed at employers without a plan.

Rollovers from 529 Plans to Roth IRAs (2024+)

Permits limited, tax‑free rollovers from long‑standing 529 accounts to a beneficiary’s Roth IRA, subject to annual IRA limits and a lifetime cap.

Operational Flexibility & Corrections

• Expanded self‑correction under EPCRS for many failures if timely addressed.
• De minimis incentives to boost participation are allowed (e.g., small gift cards).
• Hardship withdrawals may rely on participant self‑certification.