SECURE 2.0 Included in Spending Bill

The retirement industry is close to getting the holiday gift it asked for. SECURE 2.0 has been included in the omnibus spending bill that must be passed by Friday, December 23 to avoid a government shutdown. Here are a few of the provisions included in the bill:

  • Auto enrollment will be required for all new plans (employees would have to opt-out).
  • Increases the age for beginning required minimum distributions to 73 and then goes up in 10 years to age 75.
  • Higher catch-up contribution limits for employees who are 60 – 63 years old.
  • Employer matching contributions allowed on qualified student loan repayments.
  • Allowing de minimis financial incentives for contributing to a plan (not to be taken from plan assets).
  • Penalty-free emergency withdrawals of up to $1,000 in a calendar year.
  • Creation of an online searchable ‘Retirement Savings Lost and Found’ to allow individuals to identify lost retirement savings.
  • Increases the small balance amount from $5,000 to $7,000 for employers to complete forced distributions.
  • Requires catch-up contributions to be after-tax ‘Roth’ contributions for individuals earning more than $145,000.
  • Allows a participant to have employer contributions treated as after-tax ‘Roth’ contributions.
  • Part-time employees with two years of service and 500 hours per year must be allowed to make voluntary contributions (current law is three years).
  • 403(b) plans can have access to collective investment trusts and participate in pooled employer plans.

Other provisions in the bill are focused on making it easier and more cost-effective for employers to establish a plan, and updates to the Saver’s Credit to make it easier for participants to utilize.

On January 18, 2023, Greg Johnson and Candace Finn will host a webinar covering SECURE 2.0, its provisions and effective dates.. Registration information for that presentation will be available in early January.

Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice. Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients.


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