What’s Next for The Secure 2.0 Act in 2025

The introduction of the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act brought significant changes to the retirement environment by expanding contribution limits and credits, eliminating unnecessary plan requirements, focusing on Roth accounts, and more.

Since SECURE rolled out in January 2023, over half of the nearly 100 provisions under the Act have already taken effect, and there are still more to come. While the provisions are considered mostly beneficial for employees, several provisions benefit employers. To help you prepare for these changes, here are three provisions that will officially go into effect January 1, 2025:

Section 101 – Expanding Automatic Enrollment in Retirement Plans.

This one encourages more participants to save for retirement through automatic enrollment in the plan. All new 401(k) and 403(b) plans are required to automatically enroll participants in the respective plans upon becoming eligible (and the employees may opt out of coverage). The initial automatic enrollment amount is at least 3 percent but not more than 10 percent and increases each year by 1 percent until it reaches 10 percent but not more than 15 percent. All current 401(k) and 403(b) plans are grandfathered.

Section 109 – Higher catch-up limits.

This section increases the catch-up contribution limits to the greater of $10,000 or 50 percent more than the regular catch-up amount in 2025 for individuals who have attained ages 60, 61, 62 and 63. After 2025, the increased amounts are indexed for inflation.

Section 125 – Improving Coverage for Part-Time Workers.

The Secure Act established that if an employee is a long-term, part-time worker, the individual may be allowed to participate in the employers’ 401(k) plan based on years of service. This provision reduces the years of service requirement to allow for participation sooner. Employers with 401(k) plans must have a dual eligibility requirement under which an employee must complete either 1 year of service (with the 1,000-hour rule) or 2 consecutive years of service (where the employee completes at least 500 hours of service). This provision also extends the long-term part-time coverage rules to 403(b) plans that are subject to ERISA.

For a list of all provisions outlined in the legislation and their anticipated start dates, please download our SECURE Act 2.0 One-Sheet.

Planning for your retirement is not one size fits all. Every situation is unique. Our experts are here to provide the guidance and expertise you need to ensure you’re making the right decisions for your retirement savings strategy.