SECURE 2.0: Key Provisions and Implementation Challenges 

The SECURE 2.0 Act of 2022 introduced one of the most significant overhauls to retirement plan legislation in recent history. Designed to enhance retirement readiness and expand participation, the Act includes more than 90 provisions impacting employers, employees, and plan administrators. 

While many of these updates provide long-term benefits, they also bring complexity. Employers must navigate new compliance requirements, adjust administrative systems, and communicate effectively with plan participants. Below, we highlight several key provisions and two areas that continue to generate particular attention—Roth catch-up contributions and the increased force-out limit. 

Key Provisions of SECURE 2.0 

Although the SECURE 2.0 Act covers a wide range of topics, several provisions stand out for their potential impact on plan sponsors: 

• Automatic Enrollment and Escalation: New 401(k) and 403(b) plans established after 2024 must automatically enroll eligible employees at a rate between 3% and 10%, with annual escalation until the rate reaches at least 10%. 

• Expanded Access for Part-Time Employees: Employees who work at least 500 hours per year for two consecutive years (reduced from three) must now be eligible to participate in the plan. 

• Student Loan Matching: Beginning in 2024, employers may treat student loan repayments as elective deferrals for the purpose of matching contributions, helping younger workers build retirement savings. 

• Higher Contribution and Catch-Up Limits: Increased limits aim to encourage greater savings among older employees and those nearing retirement. 

These changes are intended to make saving for retirement more accessible and flexible but also require employers to coordinate closely with payroll providers, recordkeepers, and advisors to ensure accurate implementation. 

Roth Catch-Up Contributions 

One of the most discussed provisions under SECURE 2.0 is the requirement that certain catch-up contributions be made on a Roth (after-tax) basis. Beginning in 2026, employees aged 50 and older with wages exceeding $145,000 in the prior year must make all catch-up contributions on a Roth basis. 

This rule presents both opportunities and challenges for plan sponsors. On one hand, Roth contributions can provide tax-free growth for participants in retirement. On the other, employers must address several logistical considerations: 

• System Readiness: Payroll and recordkeeping systems must be capable of processing Roth-only catch-up contributions. 

• Plan Amendments: Plan documents must be updated to reflect the Roth-only requirement. 

• Participant Communication: Clear, proactive education is critical to help employees understand the impact on their take-home pay and long-term savings potential. 

The IRS’s two-year delay offers valuable preparation time, but employers are encouraged to begin coordinating with their service providers now to avoid future compliance issues. 

Increased Force-Out Limit 

Another notable change under SECURE 2.0 increases the mandatory cash-out, or “force-out,” threshold from $5,000 to $7,000 for distributions made after 2024. This update allows plan sponsors to more efficiently remove small account balances for terminated employees, improving plan administration and reducing costs. 

Key considerations for plan sponsors include: 

• Plan Document Updates: Amend plans to reflect the new $7,000 threshold. 

• Participant Notices: Ensure required communications are updated to meet regulatory standards. 

• Operational Processes: Establish procedures for identifying and notifying terminated participants eligible for force-out distributions. 

Implementing this change helps maintain cleaner participant data, minimizes administrative burden, and ensures compliance with evolving Department of Labor and IRS requirements. 

Implementation Best Practices 

To stay ahead of the upcoming deadlines, employers should focus on practical, actionable steps to ensure smooth implementation of SECURE 2.0 provisions. 

Action	Why It Matters	Timeline
Coordinate with recordkeepers and payroll providers	Confirm readiness for Roth-only catch-ups, student loan matching, and automatic enrollment	Immediately
Amend plan documents	Ensure compliance with updated SECURE 2.0 requirements	Before effective dates
Educate participants	Help employees understand new provisions and their benefits	Ongoing
Review plan operations	Implement the new force-out limit and update related processes	Immediately

Partnering for Compliance and Clarity

The SECURE 2.0 Act offers opportunities to enhance retirement readiness while improving administrative efficiency. However, implementing these provisions requires coordination, communication, and attention to detail. 

At Brady Martz, our Employee Benefits team partners with employers to help interpret new legislation, streamline implementation, and ensure compliance. To learn more about how these changes may affect your organization, contact our team today.