Webinar Recap | SECURE 2.0 Act: Critical 401(k) and Retirement Plan Changes That Will Impact Employers in 2025 and 2026

In this bonus October webinar, a panel of risk and retirement experts, including Adams Keegan’s Marty Barton, Kendel Wyatt, and Charles Rodriguez joined with Burleigh Consulting Group’s John Crews and Duncan Williams Asset Management’s Amy Koch to sort through key required provisions in the SECURE 2.0 legislation.

The discussion centered around new 401(k) rules and regulations for 2025, giving employers an opportunity to gain a better understanding of how their benefit offerings and compliance will be impacted. The panel also laid out best practices for communicating these significant changes to employees.

Didn’t catch the webinar on October 18? Click here to view it.

Background: How we got here

Many Americans aren’t saving for retirement, and a significant number feel they are behind on their retirement goals. Much of this can be attributed to financial barriers and lack of access to employer-sponsored retirement plans. In response, Congress passed the SECURE 1.0 Act in 2019 to address these issues and amended it in 2022 with SECURE 2.0, adding 90 provisions to further strengthen retirement savings opportunities.

Key provisions and requirements for 2025

Automatic enrollment in 401(k) and 403(b) plans

The SECURE 2.0 Act mandates automatic enrollment in 401(k) and 403(b) plans established on or after December 29, 2022, starting in 2025. Eligible employees will be automatically enrolled, with a portion of their salary directed to retirement savings, promoting higher participation rates.

However, the automatic enrollment rule doesn’t apply to all businesses. The key to determining whether your plan is subject to this mandate lies in when the plan documents were established. Even if a plan’s effective date was after December 29, 2022, it may still be exempt if the adoption agreements were signed before that date.

If your plan was established before December 29, 2022, or if your company employs fewer than 11 people or has been in operation for less than three years, you are exempt from this requirement. Once exempt businesses grow to 11 or more employees or pass the three-year mark, they must comply with the auto-enrollment rule.

Additionally, certain types of plans, such as SIMPLE 401(k) plans, as well as plans offered by government and religious organizations, are exempt. It’s essential for employers to determine when their plan was established and whether they fall under these exemptions. If not, they'll need to prepare to implement automatic enrollment by 2025.

Employers in multiple employer plans (MEPs) or pooled employer plans (PEPs) are not necessarily exempt from the auto-enrollment provisions of SECURE 2.0. According to IRS guidance, whether an individual company within a MEP is subject to auto-enrollment depends on the employer itself. If an employer's plan was established before December 29, 2022, and is exempt from auto-enrollment, joining a MEP or PEP typically won’t affect that exemption.

Conversely, any employer establishing a new plan by joining an existing MEP or PEP after the cutoff date would not be exempt from these provisions and so must follow the auto-enrollment provisions by 2025. Employers should review their plan documents with their brokers and third-party administrators (TPAs) now to determine what steps should be taken to comply with these new requirements.

Expansion to long-term part-time (LTPT) employee eligibility

Starting January 1, 2024, the SECURE Act allows employees who have worked at least 500 hours annually for three consecutive years, beginning in 2021, to contribute to a 401(k) plan. Employers are not required to match these contributions.

By January 1, 2025, this eligibility will apply after two consecutive years, impacting both 401(k) and 403(b) plans. Depending on how an employer’s plan is structured, this change could create a "dual-eligible" employee class, adding complexity to plan administration for employers. It’s important to analyze plan documents and consult with advisors to ensure plan compliance.

Catch-up contributions in 2025 and 2026

In 2025, participants aged 60-63 can make larger catch-up contributions – up to $10,000 or 150% of the age 50 catch-up amount, whichever is greater. Plans that allow catch-up contributions will need to accommodate this increase. By 2026, catch-up contributions for those earning over $145,000 (in 2025) will need to be Roth contributions, unless plans opt to eliminate catch-up contributions altogether.

The panel also discussed the SECURE 2.0 Act updates for requirement notices, student loan contributions, and Form 5500, as well as common questions, resources, and next steps for navigating the upcoming changes.

View the full recording here and give yourself about one hour to engage deeply with the conversation.