On December 29, 2022, President Biden signed into law The Consolidated Appropriations Act of 2023, a $1.7 trillion omnibus spending bill that includes many long-anticipated changes to employer-sponsored retirement plans. The portion of this new law impacting retirement plans is called the SECURE 2.0 Act of 2022 (SECURE 2.0), which expands on many provisions from its earlier version, known as the Setting Every Community Up for Retirement Enhancement Act (SECURE 1.0), adopted on December 19, 2019. The fundamental goal of SECURE 2.0 is to make it easier for employees to save for retirement.

While there are over 90 provisions addressed in the new law, this article is the first of a series that discusses the highlights of important key provisions in SECURE 2.0. One of the new provisions of SECURE 2.0 now allows long-term, part-time workers who would have been excluded from participation to save for retirement by reducing the hurdles for plan eligibility.

Long-Term Part-Time Workers are Eligible to Participate

Prior Rules

Historically, the rule under the Employee Retirement Income Security Act of 1974 (ERISA), was that an employee could not be excluded from participating in a 401(k) plan beyond age 21 or after completing 1,000 hours of service during a 12-month period (year of service).

SECURE 1.0 expanded eligibility by requiring that employees who perform 500 hours of service during a consecutive three-year period must also be permitted to participate in the employer's 401(k)...

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