SECURE 2.0 Act Updates: Key Changes for Your Retirement Plan in 2024

As January 1 approaches, significant updates from the SECURE 2.0 Act are set to take effect. Provisions 101 and 109 may impact your retirement plan—particularly if you manage a 401(k) plan established on or after December 29, 2022. Read on to learn how these changes could affect your plan and how HR Wise can help you meet these new requirements.

Empower Your Employees with SECURE 2.0 Act Provisions

The SECURE 2.0 Act aims to enhance retirement security by making it easier for employees to save for the future. Here's a closer look at the key provisions taking effect and what they mean for your organization.

Provision 101: Mandatory Automatic Enrollment and Contribution Escalation

Impact on Your Plan

401(k) plans established on or after December 29, 2022, must include automatic enrollment and automatic contribution increase features, with certain exceptions. This ensures employees start saving immediately and build their contributions over time.

How HR Wise Can Help

HR Wise provides comprehensive services to support these requirements:

• Payroll Services: Streamline payroll management with ease.

• Eligibility Calculations: Ensure accurate participant eligibility.

• Automatic Enrollment Support: Set up direct mail campaigns and communication strategies for new participants.

• Automatic Contribution Increase Programs: Automate contribution escalations for compliant and efficient plan management.

Our flexible solutions are designed to reduce your administrative burden while giving you the tools and options you need to stay compliant.

Action Steps

If your 401(k) plan was established on or after December 29, 2022, confirm whether automatic enrollment and escalation features are required. Consult with your third-party administrator (TPA) for detailed guidance and next steps.

Provision 109: New "Super Catch-Up Contributions"

Impact on Your Plan

Starting January 1, 2024, plans offering catch-up contributions to employees aged 50 and older will need to accommodate a new category: "super catch-up contributions." These enhanced contributions apply to employees who turn 60, 61, 62, or 63 during the calendar year. The IRS has announced that the 2025 annual limit for super catch-up contributions will be $11,250.

How HR Wise Can Help

HR Wise offers tools and resources to help you manage these updates:

• Contribution Calculators: Simplify the process of adapting to IRS limits.

• Plan Adjustment Tools: Ensure seamless integration of new contribution categories.

• Support for Plan Compliance: We’ll work with your team to ensure all systems and documentation are updated.

Action Steps

If your plan includes catch-up contributions, contact your payroll provider to confirm support for the new limits. Coordinate with your TPA to update your plan documents and align other systems with these changes.

Stay Ahead with HR Wise

Navigating regulatory changes can be complex, but you don’t have to do it alone. At HR Wise, we’re here to support your organization with tailored solutions that keep your retirement plans compliant and effective.

Ready to ensure your plan is SECURE 2.0 Act-ready? Contact HR Wise today for expert guidance and support!