Government Funding Bill, Containing SECURE 2.0, Released
Senate Appropriations Committee Chairman Patrick Leahy (D-VT) has released HR 2617, the Consolidated Appropriations Act of 2023, a $1.7 trillion fiscal year 2023 omnibus appropriations bill, whose provisions will fund government operations for the fiscal year. Included in this legislation, as has been anticipated by many, is the SECURE 2.0 Act of 2022.
The Securing a Strong Retirement Act of 2022 was passed by the House of Representatives earlier this year. The Senate HELP committee approved the RISE & SHINE Act and the Senate Finance committee likewise approved the EARN Act. The House and Senate worked together to combine these bills into the SECURE 2.0 Act that has now been included in the Consolidated Appropriations Act.
Inclusion in the Consolidated Appropriations Act was considered the last opportunity for passage of this retirement legislation in the current Congress. The Consolidated Appropriations Act must now be approved by the House and Senate and signed by the President, for it—and the SECURE 2.0 Act—to become law.
Among the 90 provisions in the SECURE 2.0 Act, some of the significant items include the following.
- Allowing workers to participate in employer plans after 2 consecutive 12-month periods of 500 hours of service, beginning in 2025
- Increasing the catch-up contribution limit for select age groups
- Requiring catch-up contributions to be made on a Roth basis for those earning more than $145,000, except for SIMPLE plans
- Permitting employer contributions to be made on a pre-tax or Roth basis
- Increasing the RMD age to 73 in 2023, and age 75 in 2033
- Expanding automatic enrollment in retirement plans
- Creating a Retirement Savings Lost and Found
- Creating new emergency savings accounts linked to individual account plans
- Allowing student loan payments to be treated as elective deferrals for purposes of matching contributions
- Modifying the existing saver’s credit to provide for a matching contribution to the individual’s retirement savings vehicle
- Creating a “starter 401(k) plan” with reduced contribution limits and nondiscrimination safe harbors
- Increasing the small employer startup credit to 100% for certain employers
- Increasing the age of disability onset for qualified ABLE programs to age 46
- Allowing certain rollovers to Roth IRAs from 529 college savings accounts
Additional details on the SECURE 2.0 Act will continue to be provided. Visit ascensus.com for the latest information.