The Biggest SECURE 2.0 Act Takeaways Impacting Employers

SECURE Act 2.0 is already impacting regulations related to employer-sponsored retirement plans and will continue to do so in the coming years.  

While several provisions have already taken effect and others will be phased in over time, this legislation is fundamentally reshaping the retirement landscape for millions of Americans and their employers. At its core, the Act aims to help U.S. workers build greater retirement security by expanding access to savings vehicles and increasing the amounts individuals can save. The SECURE 2.0 Act addresses longstanding barriers to saving and introduces innovative mechanisms and incentives designed to boost retirement savings. As these changes continue to roll out, the Act is poised to make retirement savings more accessible and impactful for the American workforce.

Required Provisions Already in Effect

Required Auto Enrollment

Automatic enrollment is increasingly becoming the standard for many retirement plans. But now, SECURE 2.0 is taking it from an option within the plan design to a required one. The provision states that all 401(k) and deferral 403(b) plans established since the signing of Secure 2.0 on 12/29/2022 are required to adopt automatic enrollment with the previous plan year (2025).

This required plans to:

• Automatically enroll participants at a minimum of 3%
• Required maximum of 10% (but could increase to discretionary maximum of15%)
• QDIA will be selected unless the participant makes a different selection
• The plan must allow for permissible withdrawals. Withdrawals must be made within 90 days after the first auto deferral.

This auto-enrollment must apply to all new employees and any current employees without a deferral election on file.

There are a few exceptions to the requirements of this automatic enrollment feature, including:

• Governmental Plans & Church Plans
• Simple 401(k) Plans
• Companies with fewer than 11 employees
• New business under 3 years old

Long-Time Part-Time Employees

Approximately 17% of the U.S. workforce is comprised of part-time workers, which equates to over 27 million employees. This group of employees has been underrepresented and underserved regarding retirement savings options. [1]

The continued inclusion of long-time part-time employees will continue to play a significant role in further expanding the coverage to a population of the workforce that typically goes underserved. Tightening the rules around excluding long-time part-time employees could go a long way in closing the gender equality gap when it comes to retirement savings, as women are more likely to work in part-time jobs that do not provide retirement plans.

The majority of part-time workers are not primarily motivated by compensation and prefer the flexibility of a part-time position. Sixty-three percent of part-time workers are female. Many are choosing these positions because of family or personal reasons.[1]

Employers offering 401(k) or ERISA 403(b) plans are required to make available the ability to defer into the plan to part-time employees with two consecutive years and at least 500 hours of service each year. There is no requirement to provide them with any employer allocations or include them in most compliance testing.

Provisions Effective in 2026

Amendment Deadlines

Plan sponsors should be mindful of the upcoming SECURE 2.0 amendment deadlines, which require Qualified Plans (excluding non-governmental or collectively bargained plans) and 403(b) plans not maintained by public schools to be amended by December 31, 2026. For SEP and SIMPLE plans, IRS Notice 2026-9, issued on January 26, 2026, provides an extended deadline of December 31, 2027.

To ensure compliance, sponsors should begin by thoroughly reviewing their plan documents, focusing on:

Default Provisions (many documents will already have defaults selected; these may include):

• Involuntary Distribution Limits
• Self-Certification for Hardships
• Super Catch-Up

Optional provisions

• Emergency Distributions
• Domestic Abuse & Terminal Illness Distributions

Evaluating Any Discretionary Changes

• Expanded eligibility for long-term part-time employees

In addition to updating plan documents, sponsors must ensure that all amendments accurately reflect current operational practices to avoid discrepancies that could lead to compliance issues. Clear and timely communication with plan participants about any changes is essential to promote understanding and engagement. Finally, sponsors should coordinate closely with vendors, such as payroll providers and recordkeepers, to facilitate the implementation of amendments and ensure all systems and processes are updated accordingly.

60-63 Catch-Up Contributions

Beginning in 2025, the SECURE 2.0 Act introduced an enhanced catch-up contribution provision for retirement plans, specifically for employees who turn ages 60–63 during the calendar year. Eligible participants in 401(k), 403(b), and 457(b) governmental plans can contribute an additional $3,250 beyond the standard $8,000 catch-up limit, resulting in a total catch-up contribution of $11,250. Although this enhanced limit was intended to be 150% of the standard catch-up, it will remain at $11,250 in 2026.

To implement this optional provision, plan sponsors must act in good faith and formally adopt the SECURE amendments. Adoption must be on an “all or nothing” basis; no substitutions or partial implementations are allowed. These requirements apply uniformly across all specified plan types, ensuring consistent application and compliance.

This enhanced catch-up opportunity allows individuals approaching retirement age to significantly boost their savings during these crucial years.

Roth Catch-Up Contributions

SECURE 2.0 has put an increased focus on Roth contributions.

The major change is the Required Roth Catch-Up provision, which mandates that certain employees must make all catch-up contributions on a Roth basis. Originally scheduled to take effect in 2024, this requirement was delayed to January 1, 2026. The IRS released IRS Notice 2023-62, issuing the final regulations in September 2025. While the final regulations do not become effective January 1, 2027, the Roth catch-up requirement must be implemented in 2026. 

To be subject to this rule, an employee must be age 50 or older during the calendar year and classified as a Highly Paid Individual, earning more than $150,000 in the prior year, indexed for inflation. The compensation is determined by Box 3 on the W-2.

Plans impacted by this provision must allow Roth deferrals for catch-up contributions; if a plan does not offer Roth contributions, affected employees will lose the ability to make catch-up contributions entirely. Employees earning less than $150,000 may continue to choose between pre-tax or Roth catch-up contributions if the plan allows. These changes require plan sponsors to coordinate with recordkeepers and payroll providers to ensure systems are ready to comply with the new requirements.

Stay Informed

The SECURE 2.0 Act has implemented several key provisions that are reshaping employer-sponsored retirement plans. Looking ahead, Plan sponsors are encouraged to continue monitoring developments and rules that will take effect in the coming year. Reviewing the full text of the legislation and being aware of updates from governmental bodies will help you to stay compliant with these new regulations.

By staying informed and proactively adapting to these evolving requirements, plan sponsors will not only fulfill their fiduciary duties but also help employees take full advantage of enhanced retirement savings opportunities provided by SECURE 2.0.

To better understand how SECURE 2.0 may impact your plan and your employees, watch our Fiduciary Academy entitled, “SECURE 2.0: Provisions That Will Impact Your Plan in 2026.”

Investment advice offered through OneDigital Investment Advisors LLC.
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[1] Zippia, “20+ Essential Part-Time Job Statistics (2023): Who Works Part-Time And Why?”