The bill also expands automatic enrollment in 401(k) plans by requiring 401(k), 403(b) and SIMPLE plans to automatically enroll participants in the plans upon becoming eligible, with the ability for employees to opt out of coverage.
SECURE 2.0 would also allow employers to fund long-term part-time employees’ retirement plans by reducing qualification from 500 hours over three years to two years.
Starting in 2023, the legislation would allow employers to match contributions to the 401(k) accounts made by employees who are paying off student loans if they don’t contribute enough to the 401(k) plan to receive a full match.
Under SECURE 2.0, repayment of qualified birth or adoption distributions would be limited to three years. It also would impose a three-year limitation on recontributions.
The legislation also includes the following provisions:
• Increases the startup credits for small employer pension plan credit to cover 100% of the cost to small employers to implement a plan for the first three years.
• Creates an additional credit to encourage small employers to make direct contributions to their 401(k) plans that can offset up to $1,000 of employer contributions for each participating employee.
• Broadens the SECURE Act’s pooled employer or open multiple employer plans (MEP) to allow unrelated public education and other non-profit employers to join a single 403(b) plan.
• Increases the saver’s credit for low= and moderate=income workers who save in retirement plans by raising the match from the federal government by 50% starting in 2025.