On December 29, 2022, President Biden signed the Consolidated Appropriations Act, 2023 into law.

This legislation contains the SECURE 2.0 Act of 2022. The Act includes several provisions related to retirement plans that: expand coverage, increase and preserve savings, and simplify administration and update rules.

Below is a summary of several provisions but is not intended to be an exhaustive list.

Expand Coverage

Startup cost tax credit increase

Provision Date: 2023

The tax credit for starting a new plan goes from 50% to 100% per year for 3 years, max $5,000/year, for employers with 50 or fewer employees (50% to $5,000/year for 51- 100 employees).1

New per participant credit for employer contributions to employees

Provision Date: 2023

Additional credit (set percentage) for employer contributions to employees up to $1,000 per employee with wages of $100,000 or less, as indexed (phasing out for employers with 51 - 100 employees).2

Credit for small employers joining MEPs

Provision Date: 2023

Employers get the startup credit when joining a MEP or PEP, not just when starting their own plan.

403(b) MEPs

Provision Date: 2023

403(b) multiple employer plans (MEPs), including the new pooled employer plans (PEPs) created by SECURE 1.0, are affirmatively permitted.

Small employer military spouse credit

Provision Date: 2023

Tax credit (up to $500) for small employers who provide faster eligibility and vesting for employees whose spouses are in the uniformed services.

Starter 401(k) and 403(b) plans

Provision Date: 2024

Employers not offering a retirement plan may offer starter 401(k) or 403(b) plans (which can also be elements within a PEP or other MEP) with employees enrolled by default at a 3 to 15% deferral rate. Annual deferral contribution limit is the same as for IRA contribution limits.

Family attribution rule reform

Provision Date: 2024

Stock attribution rules are updated to address inequities between spouses living in separate property states vs. community property states. Also, the attribution of stock between parents and minor children is modified to remove the circumstance in which totally unrelated businesses of parents are treated as having a single plan.

Long-Term Part-Time worker definition modification

Provision Date: 2025

Requires part-time workers who work at least 500 hours per year for two years to be eligible to make employee contributions to an employer’s defined contribution plan.

Increase and Preserve Savings

Increase Savings

Incentives for contributing

Provision Date: 2023

Employers may offer de minimis financial incentives, not paid from plan assets, to boost employee participation in retirement plans (e.g., low-dollar gift cards).

Matching student loan payments

Provision Date: 2024

Employees making “qualified student loan payments” can have those payments matched in the retirement plan without hurting the employer’s nondiscrimination testing.

Pension-linked (“sidecar”) emergency savings accounts

Provision Date: 2024

Employers may automatically opt non-highly compensated employees into emergency savings accounts at no more than 3% of salary with a $2,500 cap. Contributions over the limit can be directed to a Roth account or stopped. Contributions are treated as Roth elective deferrals and may be matched up to the cap. Up to 4 no-fee, no-tax withdrawals available per year. Upon separation from service, account balance may be taken as cash or rolled into a Roth plan or IRA.

SIMPLE nonelective contributions

Provision Date: 2024

Employers may make additional discretionary contributions to SIMPLEs3 of up to 10% (max $5,000, indexed).

Indexing IRA catch-up limit

Provision Date: 2024 IRA

catch-up limit for those age 50 and older is inflation indexed.

SIMPLE contribution limit

Provision Date: 2024

Annual deferral and catch-up limits to SIMPLE plans are increased by 10%.

Higher catch-up limit at ages 60-63

Provision Date: 2025

Increase age based catch-up limits to $10,000 (indexed for inflation) for participants that have reached ages 60, 61, 62, and 63.

Expanding auto-enroll

Provision Date: 2025

Automatic enrollment of new hires of employers with 11+ employees in business for 3+ years is mandatory. Enrollment from 3-10% rate, with 1% annual increase to a maximum between 10% and 15%. Applies to new plans only, existing plans are grandfathered.

Saver’s Match

Provision Date: 2027

Nonrefundable credit for contributions to Individual Retirement Accounts (IRAs), employer retirement plans, and ABLE4 accounts is replaced by a federal matching contribution deposited into the taxpayer’s plan by the Treasury, up to $2,000. The match phases out at certain income thresholds.

Preserve Savings

RMD Age Increase

Provision Date: 2023

Required Minimum Distribution age is increased under the following schedule:


Individuals Impacted


Person who attains age 72 after 12/31/22, and age 73 before 12/31/33


Person who attains age 74 after 12/31/32

RMD excise tax reduction

Provision Date: 2023

Penalty for failure to take required minimum distributions is decreased from 50% to 25% and decreased even further to 10% if the failure is corrected timely.

Force-out IRA auto-portability

Provision Date: 2024

Force-out IRAs5 can be rolled automatically into a new employer’s plan unless the participant opts out.

Surviving spouse election

Provision Date: 2024

Surviving spouses may elect to be treated as the deceased employee for required minimum distribution purposes.

529 rollovers to Roth IRAs

Provision Date: 2024

Beneficiaries of 529 college savings accounts are permitted tax and penalty free rollovers of up to $35,000 over their lifetime from 529 accounts to ROTH IRAs under certain conditions.

Retirement savings lost and found

Provision Date: 2024

A national online database at Department of Labor (DOL) is created within 2 years of enactment to enable those who may have lost track of their retirement plan to search for the contact information of plan administrators.

Withdrawal Provisions

Early distribution rules when terminally ill

Provision Date: Immediate

Early distributions to terminally ill individuals will be exempt from the additional 10% tax.

IRA charitable donations

Provision Date: 2023

The IRA charitable distribution provision is expanded to allow for one-time $50,000 distributions to charities. Annual IRA charitable distribution limit of $100,000 is now indexed for inflation.

Special needs trust RMDs

Provision Date: 2023

Special needs trusts established for beneficiaries with disabilities may provide for a charitable organization as the remainder beneficiary.

Penalty-free withdrawal for cases of domestic abuse

Provision Date: 2024

Domestic abuse survivors may withdraw the lesser of $10,000 (indexed for inflation) or 50% of their account. Distributions are not subject to the early withdrawal penalty and can be repaid to the account over 3 years with a refund for taxes paid on that money.

No penalty for emergency withdrawals

Provision Date: 2024

The additional 10% tax applied to early distributions is waived for unforeseeable personal or family emergency expenses. One distribution of up to $1,000 per year with the option to repay within 3 years.

Long-term care contract payments

Provision Date: 2025

Distributions up to $2,500/year for the payment of premiums for certain long-term care insurance contracts are exempt from the 10% early distribution tax.

Roth Provisions

Roth tax treatment for employer contributions

Provision Date: Immediate

Plans are permitted to allow employees to elect whether employer matching or nonelective contributions will be made on a Roth vs. pretax basis.


Provision Date: 2023

SIMPLE IRAs are now allowed to accept Roth contributions and SEPs may now accept employee/ employer Roth contributions.

Roth tax treatment for catch-up

Provision Date: 2024

All catch-up contributions are subject to Roth tax treatment except for those employees with compensation of $145,000 or less (indexed).

Roth plan distribution rules

Provision Date: 2024

Roth RMD parity with IRAs. No pre-death RMDs from Roth accounts in qualified plans (which is currently the rule only for Roth IRAs).

Simplify Administration and Update Rules

Simplify Administration

EPCRS expansion

Provision Date: Immediate

EPCRS6 is expanded to allow more types of errors to be self-corrected (regulatory guidance to follow within no more than 2 years).

Qualified birth or adoption distributions repayment

Provision Date: Immediate

The payback period for distributions made to participants under the qualified birth or adoption provision is restricted from no time limit to 3 years.

Qualified federally declared disaster distributions

Provision Date: Immediate

Standardized rules for disaster relief. Up to $22,000 may be distributed from employer retirement plans or IRAs without the additional 10% tax, can be accounted for as gross income over 3 years, and may be paid back to the plan. Amounts distributed prior to the disaster to purchase a home can be recontributed. Employers may permit larger amounts to be borrowed by affected individuals and for additional time of repayment. Effective for disasters beginning after 1/26/21.

Group of Plans (GoP) annual audits

Provision Date: Immediate

Participating employers with less than 100 employees and within a GoP not required to submit an audit opinion.

Unnecessary notices

Provision Date: 2023

Employers are no longer required to provide certain intermittent ERISA or Code notices to unenrolled participants provided they send an annual reminder notice of the employee’s eligibility and any otherwise required documents requested by the employee.

Hardship withdrawal self-certification

Provision Date: 2023

Participants may self-certify that they had a qualified event that constitutes the need for a hardship withdrawal.

Amendment deadline change

Provision Date: 2024

Discretionary plan amendments that increase participants’ benefits are permitted to be adopted by the due date of the employer’s tax return.

Safe harbor for deferral failure corrections

Provision Date: 2024

Employers may correct, without penalty, reasonable errors in administering automatic enrollment and automatic escalation provided the corrections are made prior to 9½ months after the end of the plan year in which the mistakes were made.

403(b) hardship withdrawal rules

Provision Date: 2024

403(b) hardship withdrawal rules conform to 401(k).

Force-out limit increase

Provision Date: 2024

Force-out amount is increased from $5,000 to $7,000.

Update Rules

Variable rate premium indexing termination

Provision Date: Immediate

The PBGC variable rate premium for DB plans, which has been increasing in recent years, is locked in to a flat $52 for each $1,000 of unfunded vested benefits.

Account aggregation for RMD

Provision Date: Immediate

Account owners are permitted to aggregate distributions from their accounts’ annuity portions and regular account holdings for purposes of determining minimum distributions.

Cash balance interest crediting rate rule

Provision Date: 2023

Clarification of the Code and ERISA rules prohibiting backloading of benefit accruals to allow plan sponsors to provide larger pay credits for older, longer service workers, specifically that the interest rate is a reasonable projection of the variable interest rate and subject to a maximum 6%.

Top-heavy test application

Provision Date: 2024

The top-heavy test is now permitted to test non-excludable and excludable employees separately, removing a source of surprise expenses for small businesses and paving the way for employers to allow workers to begin deferral contributions earlier.

Paper statement requirement

Provision Date: 2026

DC plans must provide one paper statement per year and DB plans must provide a paper statement once every 3 years.

SOURCE: Pension Resource Institute (PRI)

1. Previously, the annual credit was available for employers with fewer than 100 employees, for up to three years, equal to the lesser of: i) 50 percent of the administrative costs of establishing the plan; or ii) $5,000.

2. The set percentages are as follows: year 1 = 100%; year 2 = 75%; year 3 = 50%; year 4 = 25%; and 0% beyond.

3. Savings Incentive Match Plan for Employees, a simplified alternative to a 401(k) or 403(b) for small employers.

4. Savings accounts for individuals with disabilities created under the Stephen Beck Jr. Achieving a Better Life Experience Act of 2014 (“ABLE Act”).

5. Former employees with small account balances (below $5,000 historically but increasing to $7,000 in 2024) may be “forced out” of the plan into a separate IRA set up for them by the employer in accordance with Department of Labor regulations.

6. Employee Plans Compliance Resolution System, the IRS program for plan corrections.


Plan amendments made pursuant to this Act may be made on or before the last day of the first plan year beginning on or after 1/1/25 (2027 for governmental plans). In addition, amendments under SECURE Act, CARES Act, and Taxpayer Certainty and Disaster Tax Relief Act of 2020 conform to these new dates.

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