Secure 2.0 Act: What Plan Sponsors Need to Know in 2024

An array of new provisions under the SECURE 2.0 Act are on tap this year that are expected to profoundly impact plan design and how participants will save for the future. Read on to learn how to implement this next phase of the law successfully.

Designed to enhance access to retirement plans, increase savings, and simplify administrative tasks for employers, SECURE 2.0 has been a dynamic force in the retirement planning landscape since it was signed into law at the end of 2022. Now in its second year, new required and optional regulations have been introduced. Below, we highlight some notable 2024 benefits and explore essential action steps for plan sponsors.


  • Extended access for part-time employees: The original SECURE Act focused on access for long-term, part-time employees (LTPTs). It required 401(k) plans to allow salary deferral contributions for those who worked at least 500 hours in three consecutive 12-month periods effective January 1, 2024. SECURE 2.0 reduces this requirement to two consecutive 12-month periods, starting January 1, 2025.
  • Increase in age for required minimum distributions (RMDs): The original SECURE Act introduced an increase in age for RMDs. SECURE 2.0 goes further to increase the age to 73 for those turning 72 on or after January 1, 2023, and to age 75 for those turning age 73 on or after January 1, 2033.


  • Threshold for small amount force-out distributions for former employees: The maximum dollar threshold for small amount force-out distributions is increasing from $5,000 to $7,000 and is effective for distributions made after December 31, 2023.
  • Emergency expense withdrawals: SECURE 2.0 provides an exception for emergency expenses, allowing a penalty-free distribution of up to $1,000 per year. Participants can repay the distribution within three years, with up to four withdrawals annually at no expense to participants.
  • Emergency savings account in 401(k) plans: Employers can add an emergency savings account to their 401(k) plan, allowing non-highly compensated employees to contribute up to 3% of their compensation, not exceeding $2,500 annually. Withdrawals from this account are tax- and penalty-free.
  • Withdrawals relating to domestic abuse: Participants can self-certify domestic abuse and withdraw the lesser of $10,000 or 50% of their accounts without the 10% early distribution tax. Repayment is possible over three years, with a refund for repaid income taxes.
  • Employee self-certification of hardship withdrawals: Plans may rely on employee certification that deemed hardship withdrawal conditions have been met.
  • Eliminating unnecessary plan requirements for unenrolled participants: Plans are permitted to exclude unenrolled participants from receiving certain required notices and disclosures if certain conditions are met.
  • Student loan payments for matching contributions: Employers can now make matching contributions for qualified student loan payments under various retirement plans, effective for contributions made after December 31, 2023.
  • Employer matching and non-elective contributions on a Roth basis: Plans may allow participants to elect to receive employer contributions as Roth 401(k) contributions.

Action Steps for Plan Sponsors in 2024

  • Navigate the uncertainties: While the act brings forth significant provisions, the reality is that service providers are awaiting additional guidance on the functional details of many of the optional provisions before allowing plans to implement these changes.
  • Communicate with providers: Initiate conversations with your providers to understand their stance on the mandatory and optional provisions in 2024. As the industry seeks additional guidance, collaborative discussions can help you make well-informed decisions.
  • Align with plan goals: Consider the provisions that align with your retirement plan goals and whether they would be advantageous to your workforce. Thoughtful planning can position your organization for a seamless transition when the time comes.
  • Take time to prepare: Due to the multitude of provisions and administrative complexities associated with many of the provisions, patience and adaptability will be key. Use this time to prepare as more guidance becomes available and platform enhancements are made to properly administer the provisions.

With so much happening with the SECURE 2.0 Act this year, communication and compliance are especially important to help navigate the changes. Speak with your Financial Advisor if you have any questions or need guidance.


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Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

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