SECURE 2.0 Act


The SECURE 2.0 Act of 2022, was signed into law by President Joe Biden on December 29, 2022 as Division T of the Consolidated [Appropriations Act, 2023]. It builds on the changes made by the SECURE Act of 2019. SECURE stands for Setting Every Community Up for Retirement Enhancement.

Legislative history

, the U.S. representative for Massachusetts's 1st congressional district and chairman of the House [Ways and Means Committee], introduced the SECURE 2.0 Act as H.R.2954 on May 4, 2021. It passed the House Ways and Means Committee on May 5, 2021, and passed the full House on March 29, 2022.
On December 20, 2022, “Division T - Secure 2.0 Act of 2022” was added to H.R. 2617, incorporating H.R. 2954 into the omnibus bill. The omnibus bill, including Division T, passed the Senate On December 22nd, passed the House on December 23rd, and signed into law by President Joe Biden on December 29, 2022.

Provisions

The SECURE 2.0 Act was drafted to assist in saving and investing for retirement. To that end, it contains a number of provisions to incentivize retirement planning, diversify the options available to savers, and increase access to tax-advantaged savings programs. Several of these provisions do not take effect until later years. Some of the provisions are:
  • Expands automatic enrollment for certain retirement plans
  • Creates a "saver's match", a federal tax credit which can be claimed by a taxpayer for contributing to an employer retirement plan.
  • Increases age at which required minimum distributions start.
  • * If a plan participant turns 73 in 2024 or later, required minimum distributions must begin at age 73.
  • * If a plan participant turns 73 before 2024, required minimum distributions must begin at age 72.
  • Catch-up contributions limits are now indexed to inflation.
  • Allows additional catch-up contributions for participants aged 60 to 63.
  • Allows employers to provide incentives, such as like payments or gift cards, to employees to join a retirement plan.
  • Changes coverage requirements for part-time employees.
  • Allows tax-free rollovers of 529 plans to Roth IRAs under certain circumstances.
  • Creates several exemptions for early withdrawals, including:
  • * Withdrawals for emergency personal expenses;
  • * Withdrawals by domestic abuse victims;
  • * Withdrawals by plan participant with terminal illness;
  • * Withdrawals relating to disaster; and
  • * Corrective distributions for excess contribution.
  • Calls for establishment of a retirement plan "lost and found".
  • Allows Roth contributions to SIMPLE and SEP IRAs.
  • Allows participant to designate employer matching contributions as Roth contributions.
  • Allows employers to make matching retirement contributions based on employee student loan payments.