As featured in #WorkforceWednesday: The SECURE 2.0 Act of 2022 (“SECURE Act 2.0”) is a sweeping piece of retirement legislation with complex new provisions. This week, we highlight a few of the SECURE Act 2.0’s key changes for employer-sponsored 401(k) plans.
Emergency Savings Account
Beginning in 2024, employers can provide an emergency savings account, or ESA, for non-highly compensated employees. The ESA must be funded with Roth contributions.
Increased Involuntary Cashout Limits
The SECURE Act 2.0 also increases involuntary cashout limits from $5,000 to $7,000 starting in 2024. A former employee who maintains a balance in a qualified retirement plan can present complications for plan administrators. Thus, plans may “cash out” former participants without their consent.
Increased Catch-Up Contributions
Starting in 2025, individuals ages 60 through 63 years old will be able to make catch-up contributions of up to $10,000 annually, and that amount will be indexed to inflation.
* * *
Employment Law This Week® gives a rundown of the top developments in employment and labor law and workforce management in a matter of minutes every #WorkforceWednesday.
See below for the video and podcast links. For Other Highlights and more news, visit https://www.ebglaw.com/eltw288.
Podcast: Apple Podcasts, Google Podcasts, Overcast, Spotify, Stitcher.
* * * *
If you have questions, please reach out to the author(s).
The Workforce Bulletin blog is currently edited by Scott J. Connolly, Adam S. Forman, Greta Ravitsky, Elizabeth S. Torkelsen, and Jennifer Stefanick Barna.