A Quick Reference to the SECURE 2.0 Act of 2022

Cherisha Chapman and Pete Swisher | December 30th, 2022

Executive Summary

This is a massive piece of legislation. There are 92 provisions and they are almost universally good, with “good” being defined as “helpful to the cause of promoting retirement security.” In particular, our country is growing increasingly serious about closing the coverage, participation, and savings gaps and the social equity disparities that exist with respect to those gaps. Thus, SECURE 2.0 contains powerful new provisions for making the private, employer-based retirement system a success for more workers than ever before. 

In keeping with the head-scratching nature of the U.S. political process, near-unanimous bipartisan support is insufficient to merit a stand-alone Bill, so SECURE 1.0 was part of the Further Consolidated Appropriations, 2020 Act and SECURE 2.0 is “Division T” of the Consolidated Appropriations Act, 2023. At the time this is published, the Bill has just been signed into law by President Biden, and some of its provisions are effective immediately (i.e., 1/1/23 or before), so now is a good time for the retirement industry to get familiar with the new rules. 

SECURE 2.0 is not the end—there will be more retirement legislation in the coming years. But the combination of SECURE 1.0 and 2.0 with the growth in state retirement mandates (and a possible future federal mandate) presents us with a toolset that, we predict, will play a major role in spurring a wave of new plan formation among small businesses and rising participation and savings rates across the system. 

Top 10 Highest-Impact Provisions






“Mostly free” plan startup costs due to large increase in tax credits 



“Mostly free” credits can be used to join PEPs and other MEPs 



“Starter 401(k)” or 403(b)—a simple, deferral-only safe harbor design 



Mandatory auto-enrollment and auto-escalation for new plans 



“Saver’s match” deposited by Treasury into workers’ accounts 



403(b) pooled employer plans (PEPs) 


127, 115 

Emergency savings “sidecar” accounts and penalty-free withdrawals 



Student loan matching without hurting nondiscrimination testing 



“Group of Plans” (GoP) audits must be employer-by-employer 



A long list of simplifiers for things like notices, top heavy, and corrections 

Top 5 New Burdens






Massive systems updates while we’re still not done with SECURE 1.0 



Long-term, part-time employees eligible for deferrals in 2 years, not 3 



Sidecar emergency savings accounts are great but a heavy lift to build 



Catch-up contributions must be Roth if income is above $145,000 



One participant statement per year must be paper 

Chart Summarizing SECURE 2.0 Provisions

The goal of the chart is a concise summary of all provisions. For more details see the summary prepared by Congress, or the actual text of the Act (starting on page 2046).





Expanding auto-enroll 

Auto-enroll is mandatory for new plans at 3-10% with auto-escalation to 10-15%. For employers with 11+ employees in business for 3+ years. Existing plans are grandfathered. Starting 2025. 


Startup cost credit increase 

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). Also, there is a new credit for up to $1,000 of employer matching. The practical effect is that starting a retirement plan can be “free” or nearly so for many small employers.1 


Saver’s Match 

The nonrefundable credit for contributions to IRAs, employer retirement plans, and ABLE accounts is replaced by a federal matching contribution deposited into the taxpayer’s plan by the Treasury (somehow2), up to $2,000. The match phases out at certain income thresholds. Effective 12/31/26. 


Saver’s Match Awareness Campaign 

Treasury will conduct an educational campaign—they must report to Congress on their plan by 7/1/2026. 


PEP “payroll trustee” modification 

PEPs may appoint any named fiduciary, not just a trustee, as the party responsible for “reasonable, diligent, and systematic” contributions collection procedures. 


403(b) MEPs 

403(b) MEPs, including PEPs, are affirmatively permitted beginning after 12/31/22 (i.e., immediately). 


RMD age increase 

Required Minimum Distribution age is increased to age 73 starting on January 1, 2023 and age 75 starting on January 1, 2033. 


Indexing IRA catch-up limit 

IRA catch-up limit for those age 50 and older is inflation-indexed after 12/31/23. 


Higher catch-up limit at ages 60-63 

Catch-up contributions increase to $10,000 in 2025 (possibly more under inflation indexing) for participants aged 60-63 (i.e., attained age for the entire tax year is at least 60 and not yet 64). 


Matching student loan payments 

Employees making “qualified student loan payments” can have those payments matched in the retirement plan without hurting the employer’s nondiscrimination testing starting in 2024.



Credit for small employers joining MEPs 

Employers get the startup credit when joining a MEP, not just when starting their own plan. There was some doubt about this under SECURE 1.0. 


Small employer military spouse credit 

Small employers who provide for faster eligibility and vesting for employees whose spouses are in the uniformed services (since such spouses may move frequently and often miss out on contributions) can get a small tax credit (up to $500). Begins 2023. 


Incentives for contributing 

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). Begins 2023. 


S corp ESOP stock sales 

S corp owners may defer recognition of gains up to a 10% limit for sales to an ESOP (previously only for C corps). Begins 2028. 


No penalty for emergency withdrawals 

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. Begins 2024. 


SIMPLE nonelective contributions 

Employers may make additional discretionary contributions to SIMPLEs of up to 10% (max $5,000, indexed). Begins 2024. 


SIMPLE contribution limit and data collection 

Annual deferral and catch-up limits to SIMPLE plans are increased by 10% starting 2024. Details are a bit complex. Also, Treasury will provide a report on SIMPLE data by the end of 2024. 


SEP contributions for domestic workers 

Employers of domestic employees (e.g., nannies) may provide benefits under a SEP. Begins 2023. 


415 limit for rural electric cooperatives 

The compensation-based limit is eliminated for participants who are non-HCEs in a rural electric cooperative retirement plan. 


Force-out IRA auto-portability 

Force-out IRAs can be rolled automatically into a new employer’s plan unless the participant opts out. Begins 12 months after enactment. 


Starter 401(k) and 403(b) plans 

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 limit is the same as IRA contribution limits. Begins 2024. 


Lost savings bonds owners 

The Treasury Secretary must share certain relevant information regarding savings bonds with states to facilitate the abandoned property recovery process. 



Non-publicly traded securities in ESOPs 

ESOP rules updated to permit more ESOP stocks to be considered “publicly traded employer securities.” Begins 2028. 


ABLE program age requirement 

Increases the age by which certain disabilities must occur to qualify for an ABLE account. Begins 2026. 


Long-term, part-time workers (LTPT) 

The 3 year LTPT rule is reduced to 2 years (i.e., employees working 500+ hours in 2 consecutive years must be eligible to defer). LTPT rules are also extended to ERISA 403(b) plans. Begins 2025 (vs. 2024 under SECURE 1.0). 


529 rollovers to Roth IRAs Pension-linked 

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. Begins 2024. 


403(b) CITs 

403(b) plans are permitted to participate in collective investment trusts with other tax-preferred plans…sort of. There are still securities law issues to overcome that did not make it into the final Bill, so CITs will remain unavailable in 403(b)s for now. 


RMD life annuities 

Eliminates certain barriers to the availability of life annuities in qualified plans and IRAs. Begins 2023. 



The 25% of account balance limitation is removed and the cap raised to $200,000 that may be taken from a plan to purchase a qualified longevity annuity contract. Begins immediately. 


Insurance-dedicated ETFs 

A new type of ETF is created that is “insurance-dedicated” to allow individual variable annuities to participate in the investment. Effective 7 years after enactment. 


Account aggregation for RMD 

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


Overpayment recovery 

Retirement plan fiduciaries are granted latitude to decide not to recoup overpayments mistakenly made to retirees. If the decision is made to recoup overpayments, limitations are in place to protect plan retirees. Effective immediately.


RMD excise tax reduction

Penalty for failure to take required minimum distributions is decreased from 50% to 25% and decreased from 50% to 25% and decreased even further to 10% if the failure is corrected timely. Begins 2023.



Retirement savings lost and found 

A national online database at 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. 


Force-out limit increase 

Force-out amount is increased from $5,000 to $7,000 for distributions made after 12/31/23. 


EPCRS expansion 

EPCRS3 is expanded to allow more types of errors to be self-corrected. Effective immediately with regulatory guidance to follow within no more than 2 years. Participants in governmental 457(b) plans may make deferral changes at any time prior to the date that the compensation being deferred is available. Begins 2023. 


IRA charitable donations 

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. Effective for taxable years ENDING after the date of enactment, which means the higher limits are available in 2022 (assuming the Bill is signed into law before year end). 


Firefighter distributions 

Age 55 exception for public sector firefighters is expanded to include private sector firefighters. Begins immediately. 


First responder disability payments 

First responders are permitted to exclude service-connected disability pension payments from gross income after reaching retirement age. Begins 2027. 


Top-heavy test application 

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. Begins 2024. 


Qualified birth or adoption distributions repayment 

The payback period for distributions made to participants under the qualified birth or adoption provision is restricted from no time limit to 3 years. Effective immediately and (to a degree) retroactively. 


Hardship withdrawal self-certification 

Participants may self-certify that they had a qualified event that constitutes the need for a hardship withdrawal. Begins 2023. 


Statute of limitations for excise tax 

Changes made to ensure there is a reasonable period of limitations for violations of which taxpayers were not 



Penalty-free withdrawal for cases of domestic abuse 

Domestic abuse survivors may withdraw the lesser of $10,000 (indexed for inflation) or 50% of their account. Distributions made under this rule 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. Begins 2024. 


Family attribution rule reform 

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 sometimes absurd circumstance in which totally unrelated businesses of parents are treated as having a single plan. Begins 2024. 


Amendment deadline change 

Discretionary plan amendments that increase participants’ benefits are permitted to be adopted by the due date of the employer’s tax return. Begins 2024. 


Sole proprietor 401(k) deferrals 

New 401(k) plans sponsored by sole proprietors or single-member LLCs may allow certain deferral contributions up to the date of the employees’ tax return filing date for the first year of the plan. Effective 2023. 


Asset allocation funds benchmarking 

DOL is to update its regulations no later than two years after enactment of this Act to allow benchmarking for asset allocation funds against a blend of broad-based securities market indices, provided those meet certain requirements. 


Reporting and disclosure recommendations 

The Treasury Department, DOL, and PBGC shall review reporting and disclosure requirements for pension plans as soon as practicable and make recommendations to Congress to improve such requirements within 3 years. 


Unnecessary notices 

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. Begins 2023. 


Pension risk transfer interpretive bulletin review 

DOL shall review the current interpretive bulletin governing pension risk transfers to determine if amendments are warranted and will report to Congress its findings. 


IRA prohibited transactions 

Prohibited transactions in IRAs will be attributed only to the specific IRA in the case of an individual with multiple IRAs. Begins 2023. 



Substantially equal periodic payments rule 

Substantially equal life expectancy periodic payments will continue to be exempt from the 10% additional tax, including in the case of a rollover of the account, an exchange of the annuity, or an annuity that satisfies the required minimum distribution rules. Begins 2024 (but immediately in the case of annuity distributions). 


Rollover simplification guidance 

The Treasury Secretary shall simplify and standardize the rollover process and issue sample forms for direct rollovers to be released no later than January 1, 2025. 

325 326 

Roth plan distribution rules 

The pre-death distribution requirement for Roth accounts in employer plans is eliminated beginning after 12/31/23. 


Surviving spouse election 

Surviving spouses may elect to be treated as the deceased employee for required minimum distribution purposes. Begins 2024. 


Public safety officer insurance premium payments 

Distributions made from governmental plans to public safety officers are no longer required to be made directly to the insurance company. 


Public safety officer distribution age requirement 

Distributions made from governmental plans to public safety officers with at least 25 years of service are exempt from the 10% additional tax. Begins immediately. 


Corrections officer exception 

The public safety officer exception to the 10% early distribution tax is extended to corrections officers who are employees of state and local governments. 


Qualified federally declared disaster distributions 

Standardized rules for disaster relief so that Congress no longer needs to pass special relief for every disaster. 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. 


SIMPLE change to safe harbor 401(k) 

Employers are permitted to replace SIMPLE IRA plans with safe harbor 401(k) plans during a plan year. Begins 2024. 


Elimination of additional tax on excess IRA contributions 

Excess IRA contributions and earnings allocable to those contributions are exempt from the 10% additional tax on early distributions. 


Long-term care contract payments 

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. Begins 3 years after enactment.



Mortality table correction 

The Treasury Secretary shall amend the regulation affecting minimum funding rules for pension plans to reflect plans are not required to assume mortality improvements at any age greater than 0.78%. Effective immediately with regulations required within 18 months. 


402(f) effectiveness report 

The Government Accountability Office shall issue a report to Congress on the effectiveness of 402(f) notices. 


Special needs trust RMDs 

Special needs trusts established for beneficiaries with disabilities may provide for a charitable organization as the remainder beneficiary. Begins 2023. 


Paper statement requirement 

DC plans must provide one paper statement per year and DB plans must provide a paper statement once every 3 years. Begins 2026. 


Tribal court QDROs 

Tribal courts are now authorized under federal law to issue qualified domestic relations orders. 


Plan fee disclosure improvements 

DOL shall review its fiduciary disclosure requirements for participant-directed plans and provide a report of such to Congress within 3 years. 


Plan notice consolidation 

Treasury and DOL shall amend regulations within 2 years to allow for consolidation of certain plan notices. 


Risk mitigation information 

Plan administrators must provide information to participants comparing benefits of leaving money in the plan or taking a lump sum. Probably effective 2025 or later, depending on issuance of DOL regulations. 


DB annual funding notices 

The annual funding notice for pension plans is required to identify funding issues more clearly. Begins 2024. 


DOL PEP reports every 5 years 

The DOL Secretary shall conduct a study on the PEP industry and provide a report within 5 years and every 5 years thereafter. 


GoP annual audits 

Participating employers with fewer than 100 employees and within a GoP are not required to submit an audit opinion. The significance of this provision is that it ends speculation as to whether a GoP could have a single audit for the entire GoP, as in a PEP or other MEP, instead of separate audits being required for all audit-sized member plans. 


WORK Act Inflation impact 

New funds authorized to be appropriated for employee ownership program grants under the WORK Act for fiscal years 2025 to 2029. 


Inflation impact report

DOL and Treasury shall study the impact of inflation on retirement savings and report to Congress the findings.



Cash balance interest crediting rate rule 

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%. Begins 2023. 


Variable rate premium indexing termination 

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. 


Safe harbor for deferral failure corrections 

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. Begins 2024. 


SECURE Act amendments 

Three technical and five clerical amendments to the SECURE Act are effective as if included in the sections of the SECURE Act to which they relate. 


Plan amendment provisions 

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 January 1, 2025 (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. 



SIMPLE IRAs are now allowed to accept Roth contributions and SEPs may now accept employee/employer Roth contributions. Begins 2023. 


403(b) hardship withdrawal rules 

403(b) hardship withdrawal rules now conform to 401(k) rules beginning after December 31, 2023. 


Roth tax treatment for catch-up 

Effective for years beginning after December 31, 2023, all catch-up contributions to “qualified plans”4 are subject to Roth tax treatment except for those employees with compensation of $145,000 or less (indexed). This was one of the primary “pay for” provisions in the Act (i.e., a revenue-raiser, at least within the 10-year budget window by which legislation is “scored” for cost purposes). 


Roth tax treatment for employer contributions 

Plans are permitted to allow employees to elect whether employer matching or nonelective contributions will be made on a Roth vs. pretax basis. Begins immediately (but won’t begin immediately – too hard to implement quickly).



Charitable conservation easements 

Charitable deductions for qualified conservation contributions are disallowed beyond certain limits. 


Sunset date change for retiree health benefit payments 

The sunset date for allowing assets to be used to pay retiree health and life insurance benefits is extended to the end of 2032. 


Tax court judge provisions 

Tax Court judge retirement benefits are brought in line with those of other judges. 


Tax court special trial judges 

Special trial judges of the Tax Court are eligible for certain retirement benefits. 

1 “Free” is a dangerous word, but it is accurate to say that many small employers will have zero out of pocket cost in the first three years and the plan may be able to defray the costs thereafter. In that sense the plan will be free to the employer without having to shift startup costs to participants. 

2 This will require an extraordinary feat of national data integration.  

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

4 Be careful with the term “qualified plan”: in general, under tax law, it refers solely to plans qualified for favorable tax treatment under IRC Section 401(a)—i.e., 401(k) and defined benefit but NOT 403(b), SIMPLE, SEP, 457(b), IRAs, and retirement annuities. But for purposes of this and certain other provisions of SECURE 2.0 (including Starter 401(k) and startup tax credits), the term is specifically defined, for purposes of these specific provisions, as including all of these plan types, as described under IRC Section 219(g)(5)(A) or (B).  

About the Authors

Cherisha Chapman, ASRI, is a Fiduciary Consultant with Group Plan Systems, LLC and has worked in retirement plans for 17 years. Her time in the industry incudes extensive experience recordkeeping both public and private sector plans and everything from participant services to underwriting to people leadership. 

Cherisha has a B.S. in Business Administration from Ohio Dominican University. She also holds an Associate, Secure Retirement Institute (ASRI) from the Life Office Management Association (LOMA). 

Cherisha enjoys life with her husband, Tim, and their three children, Jacques, Lorenzo, and Parker. You will often find her cheering on her oldest at baseball games or shuttling the younger two to their various extracurricular events. The family loves traveling both around the US and abroad and have many destinations on their must-see list. 

Cherisha can be reached at cchapman@groupplansystems.com. 

Pete's headshot

Pete Swisher, CFP®, CPC, QPA, TGPC is Managing Partner of Group Plan Systems, LLC and has written and spoken extensively for over two decades on a broad range of topics covering both investment and administrative fiduciary duties. 

Pete has a degree in Linguistics from the University of Virginia, where he was an Echols Scholar and member of the rugby team. Fortunately, he wasn’t very good at rugby and thus sustained relatively few injuries. 

Pete spends his time with his wife, Shannon, their various elderly rescue animals, and, whenever possible, their three grown children, Jettie, David, and Andrew. 

Pete can be reached at pswisher@groupplansystems.com. 

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