SECURE Act 2.0 Compliance: Key Considerations for Plan Sponsors

Retirement plan sponsors are facing a pivotal moment in the evolution of workplace savings plans, as the SECURE Act 2.0 provisions reshape how sponsors design, administer, and communicate their 401(k) plans. Enacted in late 2022, this legislation builds on the original SECURE Act of 2019, introducing over 90 changes to expand retirement plan coverage, boost savings opportunities, and streamline administration.  The next major deadline is in 2026, when Roth catch-up contributions for higher earners take effect.

Now is the time for sponsors to begin evaluating plan designs, review systems, engage relevant stakeholders, and consider adjustments to benefit strategies. With 2026 on the horizon, plan sponsors may want to focus on these actions in the coming months to help keep your plan compliant and your participants informed.

Roth Catch-Up Contributions for Higher Earners

Beginning in 2026, employees with prior-year wages over $145,000 from the sponsoring employer must make all catch-up contributions on a Roth (after-tax) basis. Implementing this rule will likely require plan amendments, payroll updates, and clear participant communications about the impact on take-home pay and retirement savings. Due to the complexity, sponsors should use 2025 to prepare systems and communication materials for full readiness by January 1, 2026.

Temporary “Super Catch-Up” Contributions

Starting in 2025, SECURE Act 2.0 allows a temporary “super catch-up” for participants ages 60 through 63. Eligible individuals can contribute the greater of $10,000 or 150% of that year’s standard catch-up contribution limit. For instance, if the usual catch-up limit is $7,500, this provision could allow up to $11,250, subject to annual cost-of-living adjustments. While optional, adopting the higher cap can help late-career employees save more for retirement. Sponsors who choose this feature should update plan documents, set eligibility rules by birth year and age, and work with payroll and recordkeepers to apply the higher limit correctly.

Expanded Eligibility for Long-Term Part-Time Workers

For plan years beginning January 1, 2025, 401(k) plans must allow part-time workers who complete at least 500 hours in two consecutive years to make elective deferrals. This shortens the previous three-year service requirement and extends similar rules to 403(b) plans. Sponsors should track hours for the previous two years to identify eligible employees. Regularly reviewing recordkeeper reports and payroll integrations can help ensure timely onboarding.

Mandatory Automatic Enrollment for New Plans

For plans created after December 29, 2022, new 401(k) and 403(b) arrangements must automatically enroll eligible employees at a default contribution rate between 3% and 10% of pay. These plans must also feature automatic annual increases of 1% until deferral rates reach 10% to 15%. Employees can opt out, but the default is automatic enrollment.

Exemptions exist for businesses with fewer than 10 employees, employers less than three years old, and church or governmental plans. To comply, sponsors should confirm their plan’s start date, determine if the rule applies, and ensure payroll and recordkeeping systems are capable of supporting both initial auto-enrollment and auto-escalation for plan years starting in 2025.

Governance Priorities

Strong governance is essential: plan committees, HR, payroll, finance, and external partners should work together on a roadmap that matches regulatory deadlines with system updates and participant education. Refining plan design—clarifying defaults, simplifying choices, and enhancing financial wellness resources—can help improve outcomes for both administrators and employees.

Year-End Checklist

As you finish year-end preparations and look ahead to 2026, consider concentrating on four key areas:

• Audit plan documents and procedures for alignment with 2025 effective dates and readiness for the 2026 Roth catch-up rule.
• Work with recordkeepers and payroll providers to confirm file formats, eligibility rules, and auto-enrollment features before the first payroll of the plan year.
• Create clear communications explaining defaults, options, and tax implications, targeting employees ages 60–63 and those impacted by Roth catch-up requirements.
• Monitor IRS guidance and vendor communications to make timely adjustments as new clarifications are released.

Ultimately, SECURE Act 2.0 presents an opportunity to update retirement programs in accordance with regulatory requirements, while also supporting the financial wellness of employees. By focusing on compliance, employers can help ensure their retirement plans meet current legal standards and continue to provide meaningful benefits to their workforce.

This is intended for informational purposes only. You should not assume that any discussion or information contained in this document serves as the receipt of, or as a substitute for, personalized investment advice from Savant. Please consult your investment professional regarding your unique situation.

Patricia L. Hutchinson Director of Retirement Plan Services AIF®, MBA

Patty has been involved in the financial services industry since 2006. She earned a bachelor of science degree in marketing and management from Northern State University and an MBA from Colorado Technical University.