Secure 2.0 Update

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Believe it or not, it’s been a year and a half since the SECURE 2.0 Act was passed. As a reminder, there were over 90 provisions in the Act relating to retirement plans. Many of the provisions either apply to adopting new plans or are not relevant to most of our clients. The effective dates for all the provisions were staggered over several years. And, yes, we are still waiting for IRS and DOL guidance on many of the provisions, including some that are already supposed to be effective. We will continue to update you as more provisions become effective and as additional guidance is provided.

In the meantime, here is a summary of some of the more important provisions that are applicable to most of our clients, and that are effective this year, or in 2025, or in 2026.


Mandatory Cash Outs: The mandatory cash out limit increased from $5,000 to $7,000. Any terminated participant with a balance below $7,000 can be forced to take a distribution.

RMD’s for Roth 401(k): Participants are no longer forced to take a Required Minimum Distribution from any Roth portion of the plan.

Employer match of student loan payments: This is an optional provision that allows employers to make matching contributions into the 401(k) plan for employee repayments made on qualified student loans for higher education.


Catch-up Contribution Increases: The catch-up contribution limit for any participant aged 60, 61, 62 or 63 before the close of 2025 will increase to the greater of $10,000 or 50% more than the regular catch-up limit, as indexed, in 2025. The amounts will continue to be indexed for inflation after 2025.

Long-Term Part-Time Employees: All employees who have worked for at least 2 consecutive years of 500 hours must be given the opportunity to make employee contributions to the plan. If not otherwise eligible, they would still not be included in any employer contributions.


Roth catch up: This was supposed to be effective in 2023, but now it won’t be until 2026. All catch-up contributions for participants earning more than $145,000, indexed for inflation, will be required to be treated as Roth contributions.

Effective now, but still waiting for recordkeeping platform system updates

Treatment of employer contributions as Roth: The IRS did finally issue guidance on this provision, and now the recordkeeping platforms need to update their systems to comply with the new rule. Once that happens, employees will have the option to take any employer contribution and treat it as a Roth contribution. This provision will be optional for plan sponsors.

Please don’t hesitate to reach out with any questions. Thanks!

Plan Limits for 2023

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The IRS updated the qualified retirement plan limits for 2023.  The maximum contribution, when adding employee deferrals and employer contributions, increased to $66,000 (or $73,500 for anyone age 50 or older).  For a full explanation, please click on the “Plan Limits” tab of our website. If you have any questions regarding the plan limits or your plan design, please don’t hesitate to contact us.