SECURE 2.0 Act Passes

Congress passed the Consolidated Appropriations Act of 2023 on December 23rd, an omnibus bill that includes the “SECURE 2.0” legislation, referred to as such because it builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

Key SECURE 2.0 provisions include:

• Expanding automatic enrollment in 401(k) and 403(b) retirement plans (for plan years beginning after December 31, 2024);
• Improving coverage for part-time workers in 401(k) plans by reducing the years of service requirements for long-term, part-time workers to participate (for plan years beginning after December 31, 2024);
• Increasing the catch-up limit to apply at age 60, 61, 62 and 63 (for taxable years beginning after December 31, 2024);
• Allowing SIMPLE IRAs to accept Roth contributions (for tax years beginning after December 31, 2022);
• Increasing the age for required minimum distributions (the SECURE Act increased this to age 72, while SECURE 2.0 raises the age further to 73 starting on Jan. 1, 2023, and to age 75 on Jan. 1, 2033);
• Treating student loan payments as elective deferrals for purposes of matching contributions (for plan years beginning after December 31, 2023);
• Modifying the credit for small employer pension plan startup costs (for taxable years beginning after December 31, 2022);
• Indexing IRA catch-up contribution limits for people aged 50 and over (for taxable years beginning after December 31, 2023);
• Establishing a national, online Retirement Savings Lost & Found Database for workers and retirees to find their lost retirement accounts (no later than two years after the date of enactment); and
• Allowing small immediate financial incentives for contributing to a workplace retirement plan (effective for plan years beginning after the date of enactment).

Legislative Resources

• Bill Status – The latest status updates on the bill can be found on the Congressional Research Services’ appropriations status table. The legislation is currently pending President Biden’s signature.
• Section-by-Section Summary – A section-by-section summary of the legislation can be found here.
• Original SECURE Act – The U.S. Department of Labor has created a SECURE Act webpage for more information on the 2019 law.