401(k) glossary
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Testing & compliance
SECURE 2.0 Act
Short definition
The SECURE 2.0 Act is a federal law enacted on December 29, 2022 that changed the rules for 401(k) and other retirement plans. Its provisions phase in over several years, with several taking effect in 2025 and 2026.
What SECURE 2.0 is
SECURE 2.0 was passed as part of the Consolidated Appropriations Act, 2023. It followed the first SECURE Act of 2019 and contains dozens of retirement provisions. The ones employers ask about most:
Provision | Effective |
|---|---|
Larger startup tax credit and a new credit for employer contributions at small employers | 2023 |
Cash-out limit for small balances of former employees raised from $5,000 to $7,000 | 2024 |
No lifetime required minimum distributions from Roth 401(k) accounts | 2024 |
Automatic enrollment required in most new 401(k) plans | Plan years starting in 2025 |
Higher catch-up limit at ages 60 to 63 ($11,250 for 2026) | 2025 |
Long-term part-time employees eligible after two years of 500 hours | Plan years starting in 2025 |
Catch-up contributions must be Roth for employees with prior-year wages above the threshold ($150,000 for 2026) | 2026 |
Why it matters to employers
Some provisions are mandatory and need payroll and plan changes, such as the Roth catch-up rule and automatic enrollment for plans established after the law passed. Others are optional features you can add, such as matching on student loan payments or letting employees take employer contributions as Roth. Plan documents must be formally amended to reflect the changes by a deadline the IRS has extended, generally December 31, 2026 for most plans (IRS Notice 2024-2).
Common mistakes
Assuming a plan started after December 29, 2022 is exempt from automatic enrollment. Most are not.
Updating the plan document but not payroll, or the reverse.
Treating optional provisions as required, or adopting them without checking that your recordkeeper supports them.
Relying on 2023 summaries. The IRS has issued regulations and notices since then that changed details and dates.
Basic Capital and this term
New plans on Basic Capital that add auto-enrollment may qualify for up to $16,500 in SECURE 2.0 tax credits over three years.
Go deeper
Read the full employer guide related to: SECURE 2.0 Act
→
Sources
Internal Revenue Service: Treasury, IRS issue final regulations on new Roth catch-up rule, other SECURE 2.0 Act provisions (https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-on-new-roth-catch-up-rule-other-secure-2point0-act-provisions), retrieved 2026-11-11 U.S. Code (govinfo.gov): 26 U.S.C. 414A: Requirements related to automatic enrollment (https://www.govinfo.gov/content/pkg/USCODE-2023-title26/html/USCODE-2023-title26-subtitleA-chap1-subchapD-partI-subpartB-sec414A.htm), retrieved 2026-11-11 Internal Revenue Service: Retirement plans startup costs tax credit (https://www.irs.gov/retirement-plans/retirement-plans-startup-costs-tax-credit), retrieved 2026-11-11 Internal Revenue Service: Notice 2025-67: 2026 amounts relating to retirement plans and IRAs (https://www.irs.gov/pub/irs-drop/n-25-67.pdf), retrieved 2026-11-11 Internal Revenue Service: Retirement topics: Catch-up contributions (https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributions), retrieved 2026-11-11 Internal Revenue Service: Retirement topics: Required minimum distributions (RMDs) (https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-required-minimum-distributions-rmds), retrieved 2026-11-11
General information, not legal or tax advice.
