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The SECURE 2.0 Act of 2022 was signed into law on December 29, 2022, to increase retirement savings, improve retirement rules, and lower employer costs of setting up a retirement plan. This legislation will allow employers to provide their employees with better opportunities and retirement outcomes. It will also address additional issues related to retirement and savings that were not covered in the SECURE Act of 2019.

Plan amendments required by the act generally do not need to be made at the end of the first plan year beginning on or after January 1, 2025; however, plans must be operated in accordance with the effective date of each new provision.

The following is a summary of some of the significant provisions that may affect plan sponsors and auditors:


Effective for plan years beginning after December 31, 2024, new 401(k) and 403(b) plans must automatically enroll participants when they become eligible; employees may opt out of coverage. All 401(k) and 403(b) plans in effect on the date of enactment are grandfathered; small businesses with ten or fewer employees, new businesses (i.e., those that have been in business for less than three years), church plans, and governmental plans are exempt from this provision.

Required Minimum Distributions (RMDs)

The RMD age will increase in 2023 and again in 2033. Starting in 2024, Roth accounts will be exempt from the RMD rules while the participant is alive.

Catch-up contributions

The catch-up contribution limit will increase for taxable years beginning after December 31, 2024. Starting in 2024, all catch-up contributions must be Roth contributions for participants with compensation equal to or above $145,000.

Changes to long-term, part-time employees

The act modifies the measuring period for long-term, part-time employees from three years to two years and extends the long-term, part-time employee provision to 403(b) plans that are subject to ERISA.

Student loan payments

For plan years beginning after December 31, 2023, employers may make matching contributions under a 401(k) or 403(b) plan on employees’ qualified student loan payments. Employees who receive such matching contributions must certify annually to the employer that such payment has been made on such loan.

Increased dollar threshold for mandatory distributions

For distributions after December 31, 2023, the involuntary distribution threshold will increase from $5,000 to $7,000.

Emergency Savings Accounts Linked to Retirement Plan

Defined contribution retirement plans would be able to add an emergency savings account that is a designated Roth account eligible to accept participant contributions for non-highly compensated employees starting in 2024. Contributions would be limited to $2,500 annually (or lower, as set by the employer), and the first four withdrawals in a year would be tax and penalty-free. Depending on plan rules, contributions may be eligible for an employer match. In addition to giving participants penalty-free access to funds, an emergency savings fund could encourage plan participants to save for short-term and unexpected expenses.

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Ensuring your employees’ retirement funds are secure underlies your desire to take care of your people. Calvetti Ferguson takes a proactive approach from beginning to end when auditing your employee benefit plans. With a dedicated Employee Benefit Plan Practice Leader, our experienced team will walk you through the complex rules, regulations, and increasing scrutiny from the Department of Labor and Internal Revenue Service to understand the requirements and identify compliance issues before they arise.