Secure 2.0 for Employees

Intro to SECURE 2.0

The Securing a Strong Retirement Act of 2022 (SECURE 2.0) is a significant step forward in improving employee access to retirement benefits, such as 401(k) plans. Many of its provisions apply to small businesses with 100 or fewer employees.

Watch The Automatic Enrollment Webinar Recording

Understanding SECURE 2.0 Provisions

SECURE 2.0 improves employee’s access to retirement benefits and encourages more retirement savings. The act contains more than 90 retirement-related provisions, so consider these five favorable EMPLOYEE provisions:

Beginning in 2025, many 401(k) and 403(b) plans will be required to enroll eligible participants automatically; however, employees may opt out of coverage. Remember, there’s an exception for small businesses with 10 or fewer employees and new businesses under 3 years old. The expansion of automatic enrollment is meant to help workers—especially younger and lower-paid workers—save for retirement.

Required minimum distribution (RMD)—At a certain age, savers must start withdrawing a minimum amount from specific retirement accounts, including 401(k) and traditional IRAs. Since Jan. 1, 2023, a provision for later-stage savers increased the RMD age to 73—and, in 2033, the RMD age will increase to 75. Furthermore, starting this year, Roth contributions won’t be included when calculating the RMD.

Starting in 2025, employers are required to allow part-time employees with more than 500 hours per year after two consecutive years of service to participate in their retirement plan.

Employees exceeding 1,000 hours of service will be included in plans after one year of service.

A 529 plan (or college savings account) is a tax-advantaged plan used to pay for education expenses. Starting January 2024, 529 beneficiaries can roll up to $35,000 to a Roth IRA from a 529 plan if it’s been open for at least 15 years.

Previously, 529 accountholders faced taxes and penalties for nonqualified withdrawals, so this change allows beneficiaries to roll leftover 529 funds (e.g., unused educational funds) to the beneficiary’s Roth IRA to help save for retirement.

Starting January 1, 2025, SECURE 2.0 presents many opportunities for small businesses to strengthen their employee benefits and support the overall financial well-being of their workforce. Employees subject to automatic enrollment must choose to OPT-OUT before Jan 1, 2025.


Employee Notice for Automatic Enrollment

The following notice is the Slavic notice to employees of businesses subject to the automatic enrollment requirement for January 1, 2025.