Compliance Corner: SECURE Act 2.0 Key Provisions and Future Employer Impacts

When the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 was signed into law, it introduced one of the most sweeping updates to retirement legislation in years. While many early provisions have already taken effect, some of the most operationally significant changes for employers are still ahead.

Since its passage, retirement plan sponsors have navigated several significant changes, including provisions that took effect in January 2025. But the legislation was intentionally designed as a multi-year rollout, with additional employer obligations and plan updates continuing through 2026 and beyond.

From new paper statement requirements and Roth catch-up contribution rules to the introduction of the federal Saver’s Match, the next phase of implementation will require careful coordination between employers, payroll teams and plan administrators. These updates may seem incremental on their own, but together they represent meaningful operational and compliance shifts.

Understanding what has already changed and what’s still ahead is essential for employers to stay compliant while strengthening retirement outcomes for their workforce.

Who the Changes Affect

The SECURE Act 2.0 introduced new retirement plan requirements aimed at expanding employee access to workplace savings. These mandates apply based on when a 401(k) plan was established and certain employer characteristics. Understanding whether a plan is subject to these requirements is critical for ensuring compliance and appropriate plan design.

Employers who established 401(k) plans on or after December 29, 2022, are subject to the SECURE Act 2.0 mandates.

Employers not affected by the changes include:

• Businesses with ten or fewer employees

• Businesses that are less than three years old

• Church and governmental plans

• Plans established prior to December 29, 2022

Changes That Took Effect in January 2025

Key SECURE 2.0 provisions that have already taken effect include:

1. New 401(k) Plans to Include Automatic Enrollment in 2025

Employees are auto-enrolled at a 3-10% rate with automatic increases of 1% annually, up to 15%. Employers with fewer than ten employees or in business for less than three years are exempt.

2. Expanded Long-Term, Part-Time (LTPT) Employees Rule

LTPT rules now apply not only to 401(k) plans but also to Employee Retirement Income Security Act (ERISA)-covered 403(b) plans. In 2025, SECURE 2.0 reduced the LTPT service requirement to two consecutive years for eligibility to contribute to the plan. SECURE 2.0 mandates that part-time employees who work at least 500 hours in each of two consecutive years must be eligible to make elective deferrals to their employer’s retirement savings plan. Employer matches remain optional, not mandated. Here are some recommended steps to address LTPT employee inclusion requirements (if applicable):

• Begin tracking part-time and seasonal employees’ hours if you don’t already.

• Identify any employees who have hit the 500-hour mark for two years in a row.

• Once a part-time employee meets the LTPT definition, they must be allowed to join your plan on the next normal entry date. Set up a procedure to notify and enroll LTPT employees once they become eligible.

3. “Super Catch Up” Contributions Apply to Ages 60-63

Beginning in 2025, 401(k), 403(b) and governmental 457(b) plans optional catch-up limits increase for participants ages 60-63. Eligibility for the higher catch-up contribution limit are those who will reach age 60, but not age 64, before the close of the taxable year. The maximum catch-up contribution will either be $10,000 or 150% of the regular catch-up limit, whichever is greater. For example, if the regular limit for 2025 is $7,500, participants ages 60-63 could contribute up to $11,250. Plans will not be required to offer this feature, but those that do can provide valuable additional savings opportunities for older employees.

4. New Paper Statement Requirement

Beginning in 2026, Section 338 adds a new paper statement requirement. Unless a participant elects otherwise, retirement plan statements must be provided at least one time annually for defined contribution plans and one time every three years for defined benefit plans.

5. Higher Catch-Up Contribution Limit

Effective January 1, 2026, Section 603 requires employees age 50 or older who earned more than $145,000 in Federal Insurance Contributions Act (FICA) wages in the prior year to make catch-up contributions as Roth contributions; these individuals are also referred to as required participants under the Roth Catch-Up rule.

Those earning less than $145K continue to make pre-tax catch-up contributions. SECURE Act 2.0 Key Provisions – Future State 2027-2033 Effective January 1, 2027, the Saver's Match, which replaces the Savers Credit, will require the federal government to provide a 50% match on an individual’s first $2,000 in qualifying retirement contributions per year.

SECURE Act 2.0 brings a series of phased updates that require employers to stay proactive—tracking eligibility changes, updating plan features, coordinating with payroll and recordkeepers and preparing for new contribution and reporting rules. By staying ahead of these requirements and maintaining clear communication with employees and plan advisors, employers can help facilitate smooth compliance while supporting stronger retirement outcomes across their workforce.

Employers are encouraged to work with their retirement plan advisors, tax professionals and legal counsel to interpret, understand and maintain compliance with all applicable provisions.

Want to stay ahead of the curve when it comes to compliance updates? Catch up on our latest 50 State Update webinar or connect with a dedicated isolved HR professional.

_{Disclaimer: The information provided herein is for general informational purposes only and is not intended to be legal, investment or tax advice. It is not a substitute for professional legal, investment or tax advice, and you should not rely on it as such. No attorney-client or accountant-client relationship or any other kind of relationship is formed by any use of this information. The effective date of various provisions, amendments, and regulatory guidance may impact eligibility. The accuracy, completeness, correctness or adequacy of the information is not guaranteed, and isolved assumes no responsibility or liability for any errors or omissions in the content. You should consult with an attorney, investment professional or tax professional for advice regarding your specific situation.}