On December 29, 2022, President Biden signed the Consolidated Appropriations Act, 2023 (CAA) into law. CAA included the much anticipated SECURE 2.0 Act of 2022 (the Act or SECURE 2.0). This sweeping retirement legislation has significant impacts on large and small plan sponsors alike, as well as important changes for retirement plan participants. Among other things, these changes are intended to increase employees’ participation in plans and their retirement savings, help plan participants preserve their retirement savings, and simplify plan administration. Some of these changes are mandatory, but many are optional. The optional changes present plan sponsors with a wide range of plan design opportunities.
In the coming months, plan sponsors should consider which optional provisions of SECURE 2.0 they may want to include in their retirement programs. Many of these optional provisions could be beneficial employee retention tools if implemented, such as including emergency savings accounts within 401(k) plans to which eligible employees may contribute, providing matching contributions on qualified student loan payments by participants, and more.
Below is a list of the key changes included in SECURE 2.0 and their effective dates, beginning with provisions effective immediately and continuing with provisions effective later.
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