The significant retirement legislative package known as “SECURE 2.0” was passed on December 23, 2022 as part of the 2022 omnibus appropriations bill. The legislation is an important step forward in providing more Americans with greater retirement security. The 350+ pages of legislative text include numerous provisions aimed at expanding retirement coverage and increasing retirement savings, preserving income, and simplifying and clarifying retirement plan rules. The most important benefits include:
- Increasing access to, and participation in, retirement savings plans by expanding automatic enrollment, encouraging small businesses to start a retirement plan via new and enhanced tax credits, and enabling 403(b) plans to participate in multiple employer plan (MEPs)
- Allowing employer matching contributions based on student loan payments, so workers paying off student debt do not forego important employer-provided benefits
- Helping near-retirees close savings gaps and preserve retirement income by raising catch-up contribution limits from ages 60-63 and increasing the age for required minimum distributions from 72 to 75 over time
- Enabling more low and moderate-income Americans to save for retirement by facilitating the use of emergency savings accounts and changing what used to be a tax credit into a matching contribution from the federal government for certain retirement saver
- Promoting decumulation measures by eliminating barriers to using annuities in retirement plans and IRAs and allowing for insurance-dedicated ETFs
- Creating a national online lost and found database for retirement plans
While some provisions become effective in 2023, a number of provisions will become effective in 2024, 2025 or later years. To view the full SECURE 2.0 text, click here.