The end of the year kicks off a long to-do list for retirement plan sponsors. Plan sponsors often have to:
But the end of 2025 could come with a bit of extra homework. Thanks to the SECURE Act 2.0, several new provisions are set to take effect in the coming months that require your attention.
In this article, we’ll answer three key questions:
The SECURE Act 2.0 — short for Setting Every Community Up for Retirement Enhancement — was passed in December 2022. It builds upon the original SECURE Act, which was enacted just three years prior. Both laws sought to expand access to retirement plans and help Americans save more for the future.
The provisions in the SECURE Act 2.0 have tiered implementation dates. Some were retroactive, others took effect immediately in 2022, and many more will roll out over the next few years. We discussed some of these changes already, but today, let’s focus on the provisions that are likely to affect you in the coming months.
Employer-sponsored plans established after December 29, 2022 are now required to include automatic enrollment provisions. Beginning with plan years starting in 2025, employees must be automatically enrolled in the plan at an initial contribution rate of at least 3%. Participants can opt out of auto enrollment if they choose.
Beginning this year, plans must have an automatic escalation feature. This means that each year after enrollment, the participation’s contribution rate must automatically increase by 1% until it reaches at least 10%, but no more than 15%. Participants can opt out at any time.
The SECURE Act 2.0 already raised catch-up contributions by $1,000 for participants in 401(k) and similar plans. Beginning in 2025, your plan can offer additional catch-up contributions to participants in a specific age bracket. For participants ages 60-63, the maximum annual catch-up contribution limit increases from $7,500 to $11,250. If you want to allow these additional contributions, update your plan documents and systems accordingly.
Beginning with plan years starting in 2026, high earners making catch-up contributions must do so on a Roth basis (rather than a pre-tax basis). “High earners” are plan participants who, in the preceding calendar year, received more than $145,000 in FICA wages from the employer sponsoring the plan. Final regulations released in September 2025 provide some clarity for how plan sponsors should implement these changes, like how to correct mistakes when pre-tax catch-up contributions are made in error. Even though the Roth requirement kicks in in 2026, plan sponsors don’t need to formally update plan documents until 2027.
Beginning December 29, 2025, retirement plans can permit participants to use retirement withdrawals to pay for long-term care contract premiums. If their plan documents allow for it, participants can withdraw up to $2,500 per year to pay for long-term care insurance premiums without being assessed the 10% early withdrawal penalty.
Congress’s goal with the SECURE Act 2.0 was to help Americans build long-term financial security by increasing retirement savings. To incentivize employers to expand access to retirement plans — and to motivate employees to participate — they created or expanded several tax credits so that offering a plan is more affordable.
As the SECURE Act 2.0 provisions take effect, plan sponsors can strengthen their retirement plans and, in turn, support their employees’ financial wellbeing. As you approach year end, take time to understand what’s changing. Take advantage of the new credits if you can, and don’t forget to update plan documents as you adopt the new provisions. If you’re concerned about compliance or want support with a tax credit, reach out to your Meaden & Moore advisor, and we can help ensure your retirement plan is ready for 2026.