SECURE 2.0 Act—cheat sheet

Section

Description

Effective Date

Section 101

Expanding automatic enrollment in retirement plans

Requires auto‑enrollment and auto‑escalation for all 401(k) and 403(b) plans (with certain exceptions for collective bargaining plans, church plans, and governmental plans, as well as plans established on or before December 29, 2022). The initial automatic enrollment amount is at least 3% but not more than 10%. Each year thereafter, that amount is increased by 1% until it reaches at least 10% but not more than 15%.

Plan years beginning after December 31, 2024

Section 109

Higher catch-up limit to apply at ages 60, 61, 62, and 63

Increases catch-up limits to the greater of $10,000 ($5,000 for SIMPLE plans) or 50% more than the regular catch-up amount in 2025 for individuals who have attained ages 60, 61, 62, and 63. The increased amounts are indexed for inflation after 2025.

Taxable years beginning after December 31, 2024

Section 125

Improving coverage for part-time workers

Reduces to two years (from three years) the requirement to allow long-term, part-time workers to participate in employers’ 401(k) plans and extends these rules to ERISA-covered 403(b) plans.

Plan years beginning after December 31, 2024

Section 303

Retirement savings lost and found

Requires DOL to create and administer a national online searchable lost and found database for Americans’ retirement plans; requires plan administrators to provide annual reporting of disposition of balances for vested terminated participants.

Directs the creation of the database no later than two years after the date of enactment of this act

Section

Description

Effective Date

Section 338

Requirement to provide paper statements in certain cases

Amends ERISA to generally provide that, with respect to defined contribution plans, unless a participant elects otherwise, the plan is required to provide a paper benefit statement at least once annually.

Plan years beginning after December 31, 2025

Section 603

Elective deferrals generally limited to regular contribution limit

Provides that all catch-up contributions to qualified retirement plans are subject to Roth tax treatment. An exception is provided for employees with wages of $145,000 or less (indexed) in the prior year.

Taxable years beginning after December 31, 2025

Section

Description

Effective Date

Section 103

Saver’s Match

Changes the Saver’s Credit (applicable to tax obligations) to a federal “match” deposited into a taxpayer’s IRA or retirement plan that accepts such contributions; increases eligibility for the Saver’s Match.

Taxable years beginning after December 31, 2026

Section

Description

Effective Date

Section 102

Modification of credit for small employer pension plan start-up costs

Increases the start-up credit from 50% to 100% for employers with up to 50 employees. Additional credit provided based on employer contribution.

Taxable years after December 31, 2022

Section 107

Increase in age for required beginning date for mandatory distributions

Increases the required minimum distribution (RMD) age to 73 starting on January 1, 2023, and to 75 starting on January 1, 2033.

January 1, 2023, and January 1, 2033

Section 112

Military spouse retirement plan eligibility credit for small employers

Provides small employers a tax credit with respect to their defined contribution plans if they allow military spouses to participate with certain requirements.

Taxable years after December 29, 2022

Section 113

Small immediate financial incentives for contributing to a plan

Enables employers to offer de minimis financial incentives, not paid for with plan assets, such as low-dollar gift cards, to boost employee participation in workplace retirement plans.

Plan years after December 29, 2022

Section 128

Enhancement of 403(b) plans

Changes tax laws to allow 403(b) custodial accounts to participate in collective investment trusts.NOTE: The needed securities law provisions were not included.

Effective after December 29, 2022

Section 201

Remove RMD barriers of life annuities

Eliminates certain barriers to the availability of life annuities in qualified plans and IRAs that arise under current law due to an actuarial test in the RMD regulations.

Calendar years ending after December 29, 2022

Section 202

Qualifying longevity annuity contracts (QLAC)

Repeals the 25% limit and allows up to $200,000 (indexed) to be used from an account balance to purchase a QLAC.

Effective for contracts purchased or received in an exchange on or after December 29, 2022

Section 301

Recovery of retirement plan overpayments

Allows retirement plan fiduciaries the latitude to decide not to recoup overpayments that were mistakenly made to participants, including retirees. Certain overpayments may also be treated as eligible rollover distributions.

Effective December 29, 2022

Section 302

Reduction in excise tax on certain accumulations in qualified retirement plans

Reduces the penalty for failure to take RMDs from 50% to 25%, with a further reduction to 10% if the RMD failure is corrected in a timely manner.

Taxable years after December 29, 2022

Section 305

Expansion of Employee Plans Compliance Resolution System (EPCRS)

Expands EPCRS to (1) allow inadvertent errors to be self-corrected within a “reasonable time” and (2) apply to inadvertent IRA errors.

Effective December 29, 2022; any required guidance shall be promulgated no later than two years after the date of enactment of this act

Section 306

Eliminate the “first day of the month” requirement for governmental 457(b) plans

Allows participants in governmental 457(b) plans to change their deferral rate at any time, i.e., it is no longer necessary to request a deferral change prior to the beginning of the month in which the deferral was made.

Taxable years after December 29, 2022

Section 311

Repayment of qualified birth or adoption distribution (QBAD) limited to three years

Amends the QBAD provision to restrict the recontribution period to three years for distributions made after enactment and to January 1, 2026, for distributions made prior to enactment.

Distributions made after December 29, 2022, and retroactively to effective date of the original SECURE Act for distributions prior to enactment

Section 312

Employer may rely on employee certifying that deemed hardship distribution conditions are met

Allows employees to self-certify that they have had an event that constitutes a hardship or unforeseeable emergency for purposes of taking a hardship or unforeseeable emergency withdrawal.

Plan years beginning after December 29, 2022

Section 318

Performance benchmarks for asset allocation funds

Directs the U.S. Department of Labor (DOL) to update the fee and investment disclosure regulations within two years after the date of enactment so that investments that use a mix of asset classes, such as target date investments, can be benchmarked against a blend of broad-based securities market indices.

Effective December 29, 2022

Section 320

Eliminating unnecessary plan requirements related to unenrolled participants

Eliminates requirement for employers to provide certain annual ERISA or code notices to unenrolled participants who have not elected to participate in a workplace retirement plan, provided they receive disclosures initially and a subsequent annual reminder of the right to enroll.

Plan years beginning after December 31, 2022

Section 331

Special rules for use of retirement funds in connection with qualified federally declared disasters

Provides permanent rules relating to the use of retirement funds in the case of a federally declared disaster.

Disasters occurring on or after January 26, 2021

Section 601

SIMPLE and SEP Roth IRAs

Allows SIMPLE IRAs to accept Roth contributions. Also allows employers to offer employees the ability to treat employee and employer SEP contributions as Roth (in whole or in part).

Taxable years beginning after December 31, 2022

Section 604

Optional treatment of employer matching or nonelective contributions as Roth contributions

Allows defined contribution plans to provide participants with the option of receiving matching and nonelective contributions on a Roth basis.

Effective for contributions made after December 29, 2022

Section 110

Student loan matching

Permits an employer to make matching contributions under a 401(k) plan, 403(b) plan, governmental 457(b) plan, or SIMPLE IRA with respect to “qualified student loan payments.”

Plan years beginning after December 31, 2023

Section 115

Penalty-free withdrawals for certain emergency expenses

Provides an exception to the early withdrawal penalty for distributions up to $1,000 annually used for emergency expenses. A taxpayer has the option to repay the distribution within three years. For three calendar years following a distribution, an individual is restricted from taking additional distributions unless the original distribution is repaid or the individual makes contributions to their account equal to the amount of the distribution.

Distributions made after December 31, 2023

Section 117

Contribution limit for SIMPLE plans

Increases the annual deferral limit and the catch-up contribution limit at age 50 by 10% in SIMPLE IRAs, as compared with the limit that would otherwise apply in the first year this change is effective.

Employees with 26 to 100 employees: Employers are permitted to provide higher deferral limits, but only if the employer either provides a 4% matching contribution or a 3% employer contribution.

Makes similar changes to contribution limits for SIMPLE 401(k) plans.

Taxable years beginning after December 31, 2023

Section 120

Prohibited transaction exemption for certain automatic portability transactions

Permits a retirement plan service provider to provide employer plans with automatic portability services. Such services involve the automatic transfer of a participant’s balance in a default IRA (established in connection with a distribution from a former employer’s plan) into the participant’s new employer’s retirement plan, unless the participant affirmatively elects otherwise.

Effective for transactions occurring on or after December 29, 2023 (12 months after enactment)

Section 121

Starter 401(k) plans for employers with no retirement plan

Permits an employer that does not sponsor a retirement plan to offer a starter 401(k) plan (or safe harbor 403(b) plan) with simplified requirements and lower contribution limits.

Plan years beginning after December 31, 2023

Section 127

Emergency savings accounts linked to individual account plans

Provides employers the option to offer to their non-highly compensated employees pension-linked emergency savings accounts (PLESA). Contributions are treated as Roth and are prohibited once the portion of the PLESA account balance attributable to PLESA contributions meets or exceeds $2,500 (indexed). Auto-enrollment and match are permitted, subject to conditions.

Plan years beginning after December 31, 2023

Section 304

Updating dollar limit for mandatory distributions

Increases the amount that plans can require to be distributed following termination without consent from $5,000 to $7,000.

Distributions made after December 31, 2023

Section 314

Penalty-free withdrawals for victims of domestic abuse

Allows retirement plans to permit participants that self-certify that they experienced domestic abuse to withdraw up to the lesser of $10,000 indexed (or 50% of the vested balance) within one year of incident without penalty.

Distributions made after December 31, 2023

Section 325

Roth plan distribution rules

Eliminates pre-death RMDs from Roth accounts in employer plans.

Taxable years beginning after December 31, 2023 (Note: Change does not apply to distributions required with respect to years beginning before January 1, 2024, but payable on or after such date.)

Section 602

Hardship withdrawal rules for 403(b) plans

More closely aligns the hardship rules for 403(b) plans to those for 401(k) plans.

Plan years beginning after December 31, 2023