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New incentives to help grow Americans’ retirement savings

Enacted in December 2022, the SECURE 2.0 Act encourages Americans to save
for retirement and incentivizes employers to offer retirement plan benefits. It will
have an undeniable impact on businesses of all sizes in the coming years.

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The SECURE 2.0 Act:

Leveraging legislation to keep employee benefits competitive

View Insperity’s webinar on SECURE 2.0 for opportunities to gain a talent advantage by supporting your employees’ financial health beyond the basics of a 401(k) plan. From this in-depth discussion, discover how the legislation’s new provisions enhance your employee compensation strategy and learn ways to determine the features most important to your team.

What is SECURE 2.0?

  • The SECURE 2.0 Act of 2022 is a law designed to improve retirement savings in the U.S. It builds on previous legislation, Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.
  • The Act contains over 90 new provisions to promote retirement savings, boost incentives for businesses to offer retirement plans and offer more flexibility to those saving for retirement.
  • Some provisions are already in effect, while others will go into effect in 2024, 2025 and even later.
  • Some provisions are required while others are optional for plan sponsors to provide.

Why is it important?

  • SECURE 2.0 is important because it encourages and makes it easier for employees to save for retirement and incentivizes employers to offer retirement plan benefits.
  • For employees, it increases catch-up contribution limits, increases the age for required minimum distributions, and expedites eligibility for long-term, part-time employees, among other enhancements.
  • For small businesses, it includes tax credits for plan start-up costs and employer contributions.

Key provisions of the legislation

  • Enhanced tax credit incentives for small businesses starting retirement plans
  • Automatic 401(k) plan enrollment and escalation
  • Expanded use of Roth contributions
  • Increased age for required minimum distributions (RMDs)
  • Increased catch-up contribution limits
  • Expedited eligibility for part-time employees
  • Expanded access to retirement savings including emergency savings
  • Employer 401(k) match for student loan payments
  • Federal saver’s matching program for low- to middle-income employees

What’s next?

Insperity is fully committed to working with our clients to ensure compliance with all provisions required under the SECURE 2.0 Act.

Stay tuned for resources and updates regarding provisions going into effect in the coming months and years.

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