In our prior alert, we introduced the SECURE 2.0 Act of 2022 (SECURE 2.0 or the Act), a portion of the Consolidated Appropriations Act of 2023. There we discussed key provisions applicable to all qualified retirement plans. This alert, part of our ongoing series covering the retirement plan changes in SECURE 2.0, summarizes provisions applicable only to defined contribution plans.

Provisions Impacting 401(k) and 403(b) Plans

Higher Catch-Up Limit to Apply for Ages 60-63. Individuals age 50 and over are permitted to make catch-up contributions under a retirement plan in excess of the otherwise applicable limits. The Act further increases these limits for participants who have attained age 60, but have not attained age 64, to the greater of $10,000 or 150 percent of the regular catch-up amount for 2024, indexed for inflation. These changes become effective January 1, 2025.

Treatment of Student Loan Payments as Elective Deferrals for Purposes of Matching Contributions. SECURE 2.0 permits sponsors of defined contribution plans to treat "qualified student loan payments" as elective deferrals for matching contribution purposes. A qualified student loan payment is broadly defined as any indebtedness incurred by the participant solely to pay the participant's cost of attending an institution providing post-secondary education. Eligible participants are required to annually certify the amount and timeliness of any loan payments made. This provision is effective for plan years...

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