Mary Beth’s Corner

What You Need to Know About SECURE 2.0

answers to your questions around SECURE 2.0


The House and Senate have passed the Consolidated Appropriations Act of 2023, which includes a grouping of retirement plan provisions better known as, “SECURE 2.0”. 

On December 23, 2022, the bill was presented and signed into law by President Biden.

4 Key Provision Changes

SECURE 2.0 brings several advancements to the retirement industry, providing more opportunities and benefits for Americans to utilize retirement savings. 

There are a total of 10 plan provisions that the passing of SECURE 2.0 will bring. Below is a summary of some of the most broadly applicable existing plan provisions that have been refined by congress and are present in SECURE 2.0.

  • Increase in RMD AgesEffective January 1, 2023 
    • The RMD age will increase from 72 to 73 where it will stay for a decade before jumping to 75 in 2033.
    • Starting 2023, the current excise tax penalty for not taking an RMD will decrease from 50% to 25%. The penalty drops down to 10% if the necessary RMD is taken by the end of the second year following the year it was due. 

  • Mandatory Automatic Enrollment Effective after December 31, 2024
    • New 401(k) and 403(b) plans are required to automatically enroll employees when eligible. Automatic deferrals start at between 3% and 10% of compensation, increasing by 1% each year, to a maximum of at least 10%, but no more than 15% of compensation.
      • The exception: Small businesses with 10 or fewer employees, new businesses that have been operating for less than three years and church plans are not required to implement automatic enrollment. 

  • Long-term, Part-time Worker QualificationsPlan year beginning after December 31, 2024.
    • Currently, part-time employees with at least 1,000 hours of service in a 12-month period or 500 service hours in a three-consecutive-year period must be eligible for their employer’s qualified retirement plan. SECURE 2.0 reduces the three-year rule to two years.

  • Catch-up Limits IncreasedEffective for tax years after 2024
    • Currently, for those aged 50 and older the catch-up contribution is capped at $7,500 for most retirement plans. SECURE 2.0 provides a second contribution increase of $10,000 ($5,000 for SIMPLE Plans, $1,000 for IRAs) for those aged 62 to 64.

More to Come..

At this moment, My Benefits is reviewing the recent legislative updates and timing of these provisions to see how they will affect the retirement plan industry going into 2023. Keep an eye out for upcoming information on the additional provisions that will be shared as we learn more.

In the meantime, if you have questions regarding your plan, we encourage you to contact your dedicated plan administrator to discuss potential changes.



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