Navigating the Secure 2.0 Act
Stay informed on the SECURE 2.0 Act
As a plan sponsor, it's crucial to stay informed and up-to-date with the latest legislation impacting retirement plans, and we're here to provide the resources you and your advisor or consultant need.
On this page you’ll find information to help you navigate SECURE 2.0 and meet your responsibilities while offering your employees an exceptional retirement plan.
The SECURE 2.0 Act of 2022 (SECURE 2.0) is legislation aimed at improving retirement security for Americans. It builds on the original Setting Up Every Community for Retirement Enhancement Act of 2019 (the SECURE Act), which introduced significant changes to retirement plan rules. SECURE 2.0 includes new provisions to encourage retirement savings, expand access to retirement plans, and provide greater flexibility for retirees.
What's new in SECURE 2.0?
Pension-linked emergency savings accounts: New guidance from IRS and DOL
The IRS and DOL have issued coordinated guidance on Section 127 of the SECURE 2.0 Act, which established pension-linked emergency savings accounts (PLESAs). This discretionary provision offers a short-term savings option tied to retirement plans. Non-highly compensated plan participants who meet eligibility requirements can contribute to a PLESA, with a maximum contribution limit of $2,500 (adjusted for inflation), designated as Roth.
Click here to learn more about this new provision.
IRS Notice 2024-2: “Grab bag” guidance on various SECURE 2.0 provisions
On December 20, 2023, the Internal Revenue Service (“IRS”) released Notice 2024-2 (the “Notice”), providing its long-awaited “grab bag” of SECURE 2.0 guidance. Among other things, the guidance provides a one-year extension for amending plans for SECURE 2.0, the SECURE Act of 2019, and the CARES Act; it addresses the impact of mergers, acquisitions, and spin-offs on the requirement to add automatic enrollment to 401(k) and 403(b) plans; it discusses the treatment of Employer Roth contributions, including how taxation and the vesting rules work; it clarifies the rules around terminal illness distributions; and includes a definition of “de minimis” and guidelines for offering small immediate financial incentives to encourage participation.
Click here to read Transamerica’s article on the Notice.
Mandatory provisions
Many of the provisions within SECURE 2.0 are mandatory. We have provided a list of key mandatory provisions, a detailed description of the provisions, and the potential impacts they may have on your retirement plan.
Which provisions are you considering?
SECURE 2.0 was one of the most material pieces of retirement legislation in recent years, with more than 90 provisions. While some provisions are mandatory, optional provisions allow plan sponsors the opportunity to evaluate and update plan design features.
Check out our reference guide to learn more about these optional provisions to see which ones you may find of interest.
Feel free to reach out to your Transamerica representative to discuss any of these in more detail.
A closer look at select provisions
In the spring of 2023, we conducted a survey to help us better address some of the most talked-about provisions.
After reviewing the responses, we have identified the seven most anticipated provisions.
Please take a moment to review the details of each provision and learn more about how they can be implemented.
Emergency expenses
Section 115, allows withdrawals for certain emergency expenses.
Coverage for long-term, part-time workers
Section 125, improves coverage for part-time workers.
Small balance cash-outs
Section 304, updates dollar limit for mandatory distributions.
Federally declared disasters
Section 331, offers special rules for use of retirement funds in connection with qualified federally declared disasters.
Eliminate/consolidate required notices
Section 320, eliminates most notice requirements related to unenrolled participants.
Section 341, instructs the IRS and DOL to consolidate defined contribution plan notices.
Self-certification
SECURE 2.0 allows employee self-certification in several areas, including:
- Section 110, employer match on student loan payments
- Section 115, withdrawals for certain emergency expenses
- Section 312, self-certification for hardship withdrawals
Required minimum distributions
SECURE 2.0 includes several provisions related to required minimum distributions:
- Section 107, increasing the age for required beginning date for mandatory distributions.
- Section 204, eliminating a penalty on partial annuitization.
- Section 302, reducing the excise tax on late RMDs from qualified retirement plans and IRAs.
- Section 325, excluding Roth balances from retirement plan RMDs.
- Section 327, requiring surviving spouse election to be treated as employee.
- Section 337, modifying required minimum distribution rules for special needs trusts.
Provisions for specific plan types
SECURE 2.0 made sweeping changes to laws affecting retirement-related programs and benefits.
In this section, you can learn more about how it impacts specific plan types.
- 403(b)
- Defined benefit
- MEPs
- PEPs
- Group of plans (GOPs)
- SIMPLEs
- SEPs
- ESOPs
- 457(b)
How does the SECURE 2.0 Act impact new plans?
Provisions affecting new retirement plans
SECURE 2.0 included several provisions that impact new retirement plans, including incentives to help employers start a plan and add automatic enrollment.
Credits for new retirement plans
SECURE 2.0 provides some great incentives for employers starting a new retirement plan, but figuring out who is eligible and which credits apply can be challenging.
This worksheet will help you understand and calculate the three credits now available for start-up plans.
Additional resources
Explore more about the SECURE 2.0 Act and its impact on your plan.
Discover helpful tools, articles, and other valuable information to help you stay informed and make inportant decisions.
More provisions to explore
Read this guide to SECURE 2.0 provisions related to plan corrections, annuities, taxation, and more.
Chart: SECURE 2.0 provisions
This reference chart summarizes all SECURE 2.0 provisions affecting retirement plans.
Interactive reference guide
Easily find what you’re looking for in our all-in-one-place, clickable guide to SECURE 2.0 Act provisions.
Chart: Defined benefit plan provisions
This reference chart describes changes affecting defined benefit plan sponsors.