SECURE 2.0: Changes affecting defined contribution (DC) plans
The SECURE 2.0 Act of 2022 (Div. T of Pub. L. No. 117-328) is intended to build on changes made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 (Div. O of Pub. L. No. 116-94).
-
- Long-term part-time worker eligibility (Sec. 125)
- Auto-enrollment and escalation for new plans, with some exceptions (Sec. 101)
- Small financial incentives for participation (Sec. 113)
-
- Matching student loan payments (Sec. 110)
- Higher catch-up contribution limit (Sec. 109)
- Roth-only catch-up contributions for high earners (Sec. 603)
- Option for Roth employer match and nonelective contributions (Sec. 604)
- Pension-linked emergency savings accounts (PLESAs) (Sec. 127)
- Expanded saver’s credit match (Sec. 103)
-
- Increase in age for required minimum distributions (RMDs) (Sec. 107)
- No predeath RMDs for Roth accounts (Sec. 325)
- Increase involuntary cash-out limit (Sec. 304)
- Disaster relief (Sec. 331)
- Reliance on employee certification for hardship distributions (Sec. 312)
- Penalty-free withdrawals for emergency expenses (Sec. 115)
- Penalty-free withdrawals in the event of domestic abuse (Sec. 314)
- Penalty-free withdrawals for terminal illness (Sec. 326)
- Qualified long-term care distributions (Sec. 334)
- Three-year repayment limit on qualified birth or adoption distribution (QBOAD) (Sec. 311)
-
- Removal of RMD barriers for life annuities (Sec. 201)
- More qualifying longevity annuity contract (QLAC) flexibility (Sec. 202)
- Elimination of RMD penalty on partial annuities (Sec. 204)
-
- 403(b) MEPs (Sec. 106)
- Investment in collective investment trusts (CITs) (Sec. 128)
- Hardship withdrawal conforming changes (Sec. 602)
- Long-term part-time worker eligibility (Sec. 125)
-
- 403(b) MEPs (Sec. 106)
- Designation of named fiduciary for contributions (Sec. 105)
- Application of startup credit for MEPs (Sec. 111)
- DOL report on PEPs (Sec. 344)
-
- Elimination of “first day of the month” requirement for governmental 457(b) plans (Sec. 306)
- Extension of qualified public safety employee distributions to private-sector firefighters (Sec. 308)
- Extension of qualified public safety employee distributions to corrections officers (Sec. 330)
- Distributions to retired public safety officers for health and long-term care premiums (Sec. 328)
-
- Higher SIMPLE catch-up contribution limits (Sec. 109)
- Additional nonelective contributions for SIMPLE plans (Sec. 116)
- Increased SIMPLE deferral and catch-up contribution limits (Sec. 117)
- Replacement of SIMPLE IRAs with safe harbor 401(k) plans during plan year (Sec. 332)
- Roth for SEPs and SIMPLEs (Sec. 601)
-
- Auto-portability prohibited transaction exemption (PTE) and requirements (Sec. 120)
- Starter 401(k) plans (Sec. 121)
- Separate top-heavy testing for excludable and nonexcludable employees (Sec. 310)
- Extended deadline to adopt amendments increasing benefits (Sec. 316)
- Spousal beneficiary election to be treated as employee (Sec. 327)