Use SECURE 2.0 to grow

Image: Use SECURE 2.0 to grow

Passage and rollout of the SECURE 2.0 Act is great news for plan sponsors and savers, providing stronger plans, additional ways to solidify financial futures, and enhanced peace of mind.

It’s also a unique opportunity for you to connect with new and existing clients, highlight your knowledge and value as a trusted advisor, and ultimately serve as a lever to grow business.

If you haven’t had a chance to explore each provision in detail—or typically aren’t focused on selling retirement plan business—don’t sweat it. Check out the following provisions that provide immediate opportunities for you to advise clients and build your business.

Favorable tax provisions provide greater incentives for plan sponsors to launch a retirement program.

Provision What changed? Effective date Positioning

Start-up credit

Increases the potential start-up credit from 50% to 100% for employers with up to 50 employees,1 up to $5,000 for plans with 20 or more non-highly compensated employees (NHCEs). The credit is available for the first three years a plan is in place.

Tax years beginning after December 31, 2022

Do you have smaller clients who are on the fence about launching a plan?

Highlight the availability of the start-up credit and employer contribution credit, which allow plan sponsors to recoup costs when they set up and administer their plan and make employer contributions.

Use our start-up tax credit calculator as a helpful tool to show clients their tax savings when they establish a new plan.

Employer contribution credit

Introduces a new credit for employers that adopt a new retirement plan and make employee contributions. Employers can receive a credit of 100% of eligible contributions to certain employees for the first and second years of the plan, with reductions in the third, fourth, and fifth years.  

Auto-enrollment features can help plan sponsors boost participation and even retention levels.

Provision What changed? Effective date Positioning

Requires auto-enrollment and auto-escalation for 401(k) and 403(b) plans established on or after December 29, 2022.2

  • Employees must be auto-enrolled at a rate of at least 3%, but not more than 10%.
  • Plans must increase contributions by 1% each year up to at least 10%, but no more than 15% of pay (10% for non-safe harbor plans until the 2025 plan year).
  • Auto-enrolled participants can withdraw their contributions and stop participating in the plan within 90 days.
Plan years beginning after December 31, 2024

Analyze your client list to identify those not offering auto-features today—and consult with them about why it’s so powerful. You can share the following stats:

  • Plans with auto-enroll have 30% higher participation.3
  • Eligible employees who don’t enroll in their company’s retirement plan leave their employer at a rate three times that of employees enrolled in the plan.3

More employers can now join with other plan sponsors to achieve economies of scale.

Provision What changed? Effective date Positioning
403(b) eligibility for Multiple Employer Plans (MEPs) and Pooled Employer Plans (PEPs) 403(b) plans sponsored by nonprofits, charities, and educational institutions may now participate in a MEP,4 including a PEP. Plan years beginning after December 31, 2022 Smaller clients are looking for simple, cost-effective options. Consider proposing a bundled MEP or PEP solution, which can help them pool costs, simplify administration, capture tax credits, and protect against risk through fiduciary services.

More assets and contributions will flow to plans—and remain in plans longer.

Provision What changed? Effective date Positioning
Increased catch-up contributions (ages 60-63) Increases catch-up limits to the greater of $10,000 ($5,000 for SIMPLE plans) or 50% more than the regular catch-up amount for savers ages 60-63.5 Tax years beginning after December 31, 2024 Showcase your expertise and knowledge by promoting these provisions during client conversations. Remember, more plan assets can mean more compensation for you.
Roth catch-up contributions Participants age 50+ whose prior-year compensation from the plan sponsor exceeds $145,0006 may only make catch-up contributions on a Roth basis. Tax years starting January 1, 2024 Consider marketing to catch-up eligible participants. Often, these participants have higher balances and incomes, are close to retirement age, and are considering a rollover scenario.
Increased required minimum distribution (RMD) age Increases the RMD age to 73 in 2023 and to 75 in 2033. Applies to distributions required in 2023 and later years, for those who turn 72 after December 31, 2022 A managed account may make sense for those who have assets remaining in the plan for longer time periods. Talk to clients about the benefits of a managed account if they don’t already offer this option in their plan.

Looking for more ideas to grow your business?
We can help you get there. Contact your Ascensus sales representative or client service team at 800-345-6363 or

1Assumes all other IRS requirements are met for employers who have no more than 50 employees and have at least one non-highly compensated employee who is eligible to participate.
2There are exceptions for certain plans—including collective bargaining plans, church plans, governmental plans, SIMPLE 401(k) plans, businesses in existence for less than three years, and employers normally employing 10 or fewer employees.
3Ascensus data as of December 31, 2021. Plan average and individual employer results will vary.
4The MEP must be maintained by (a) only governmental employers or (b) only non-governmental employers.
5Catch-up provisions will be indexed for inflation.
6Subject to IRS annual cost of living adjustments (COLA) in increments of $5,000.