SECURE 2.0 Key Considerations

Aug 29, 2023 | 2024, 2025, 2026, Retirement Plan Law

SECURE 2.0 introduced an extensive series of retirement plan provisions that can be both beneficial yet demanding , particularly in terms of application . Here are some key considerations for three SECURE 2.0 provisions that are top of mind.


1. Roth Only Catch-Up Contributions 

Welcome Relief!

The IRS has extended the Roth Catch-Up Contribution requirement until 2026. While this does not preclude high wage earners from contributing on a Roth basis, this new guidance provides waiver from the original effective date of January 1, 2024.


What is the Roth Catch-Up Requirement?

Employees aged 50 and older who earned $145,000 or more the prior year can only make catch-up contributions on a Roth basis, regardless of if the employee is contributing on a pre-tax basis for non- catch-up contributions.

2. Employee Election of Company Contributions as Roth

Already in effect, employees can choose to have company contributions made on a Roth basis if acceptable by the plan. These contributions must be 100% vested when made.

This is a complex provision that requires some additional guidance before being implemented.

  • Key Considerations:
  • Timing
    • Many companies wait to make their contribution several months or more after the close of the year, so questions have arisen regarding how to make these contributions and account for the necessary taxes at the payroll level.
  • Alternative Idea
    • Many plans already permit in-plan Roth conversions, which allow employees to convert all or a part of their pre-tax balance to Roth.
      • Tax reporting may be simpler as there is no plan-level event (the participant reports the conversion on their personal tax return).
      • Each participant retains flexibility to make the decision on an annual basis.

3. Matching Contributions on Student Loan Repayments

Effective in 2024, employees may start obtaining matching contributions on their student loan repayments, if the plan permits this provision.

  • Key Considerations:
  • Administrative Complications
    • Separate compliance testing is required for these matching contributions
    • Collecting verifiable data from student loan firms to calculate a valid match
      Timing match contributions – allocations cannot be made until data are received, which may limit per pay period contributions
  • Federal Guidance
    • More governmental direction is anticipated regarding simplifying these types of contributions.
  • 4. Catch-Up Contribution Limit Increases

Effective in 2025, for employees aged 60 to 63, there will be a higher catch-up contribution limit of the greater of $10,000 ($5,000 for SIMPLE plans) or 150% of the regular catch-up amount, and this will be indexed for inflation starting in 2026.

We will continue to coordinate with plan sponsors, payroll companies, and other providers to apply and implement the many of the SECURE 2.0 provisions, and we will keep you posted on future developments as we move towards the end of 2023.
Roth Only Catch-Up Contributions & Limits. Employee Election of Company Contributions as Roth. Matching Contributions on Student Loan Repayments.


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