This user-friendly summary allows you to navigate through the intricacies of the SECURE 2.0’s legislations with ease, making your research process more efficient and insightful.
Easily access and gain a comprehensive understanding of each legislation, by clicking HERE and searching the specific section numbers outlined below.
Section: 101
Mandatory Auto Enrollment
Encouraged to include now to avoid future amendments
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New plans starting in 2025 must auto-enroll participants with a salary deferral of 3%–10% and increase by 1% per year up to 10%-15%.
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Section: 110
Student Loan Payment Match
Employer matching contribution
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Subject to recordkeeper capabilities.
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Section: 115
Emergency Withdrawals
10% tax penalty waived
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$1,000 withdrawal limit for an unforeseeable or immediate financial need viewed as an emergency expense.
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Section 121:
Starter 401(k) Retirement Plan
$6,500 deferral limit
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No compliance testing, but lower deferral amounts, and no employer contributions are permitted.
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Section: 126
529 Savings Rollover to IRAs
Tax and penalty free
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Rollover up to $35,000 from 529 accounts to Roth IRAs allowed under specific conditions, including a 15-year account duration and subject to Roth IRA contribution limits.
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Section: 304
Force-out Limit Increase
Limit increase from $5,000 to $7,000
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Increases the force-out threshold for employers to reduce administrative costs and fiduciary liability.
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Section: 312
Self-certify for Hardships
Hardship withdrawals more accessible
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Simplifies the process for employers of granting hardship withdrawals to participants.
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Section: 332
SIMPLE to 401(k) Conversion
Conversions permitted mid-year
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Employers no longer have to wait until the next year to take advantage of higher contribution limits of a 401(k).
While a Non-Qualified retirement plan seems appealing because of no contribution limits or compliance testing, it lacks the immediate tax benefits to the employer, a guaranteed benefit, and creditor protection to the employee found in a Cash Balance Plan.
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For any questions or clarification, don't hesitate to reach out – we're here to simplify the complexities of SECURE 2.0 and ensure a clear understanding of this intricate legislation.
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About the author
Heather Craigg