01.05.23
On December 29, 2022, President Biden signed the Consolidated Appropriations Act, 2023 (Funding Bill) before government funding was set to expire. Nestled in the 4,000+ page Funding Bill is the SECURE 2.0 Act of 2022 (SECURE 2.0).
- SECURE 2.0 Purpose: Congress determined that many Americans reach retirement age with little to no savings. Consequently, SECURE 2.0 seeks to (1) increase opportunities to participate in employer-sponsored retirement plans; (2) incentivize employers to sponsor retirement plans; (3) ease the regulatory burden of sponsoring retirement plans; and (4) better educate Americans about retirement plans and saving for retirement.
- Effective Dates: Each of SECURE 2.0’s provisions has its own effective date. The effective dates range from the date of SECURE 2.0’s enactment (December 29, 2022) to 2028 and beyond, with the bulk of the provisions taking effect in 2024.
- Amendment Deadline: Amendments for SECURE 2.0 generally must be made by the last day of the first plan year beginning on or after January 1, 2025 (i.e., December 31, 2025, for calendar year plans). The deadline for governmental plans and collectively bargained plans is the last day of the first plan year beginning on or after January 1, 2027 (i.e., December 31, 2027, for calendar year plans). These deadlines also generally apply to SECURE and CARES Act amendments due to a helpful provision in SECURE 2.0.
Many of SECURE 2.0’s provisions solely apply either to defined contribution plans, such as 401(k) and 403(b) plans, or defined benefit plans, such as traditional pension and cash balance plans. There are also a handful of provisions that apply to both types of retirement plans. The update available below (PDF) provides brief summaries of select SECURE 2.0 provisions.
