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What is SECURE 2.0

The SECURE Act 2.0, a follow-up to the Setting Every Community Up for Retirement Enhancement
(SECURE) Act of 2019.

The federal government has enacted a new law with the goal of making it easier for retirement plan participants to save. Employees will be able to save more through increased catch-up contributions, receive employer matching contributions on student loan repayments and participate in emergency savings accounts.

Employers will need to review their plan documents and adopt changes for the new law.

Some of the more interesting highlights of the SECURE Act 2.0 are:

Beginning in 2024:

  • Employers can make employer matching contributions for their employees’ student loan
    payments, even if the employees aren’t contributing to their plan.
  • Employers may offer participants an emergency savings withdrawal of up to $1,000 per year. This withdrawal is not subject to an early withdrawal penalty and may be repaid over three years.
  • Employers may offer non-highly compensated participants an emergency savings account.
    Employees may voluntarily contribute or may be automatically enrolled at up to 3% of their
    annual pay that will be capped at $2,500.00

Beginning in 2025:

  • Catch-up contributions of $10,000 or 50% more than the standard catch-up amount, for certain participants (60 through 63 and making over $145,000) must be made as Roth contributions (after-tax dollars). Participants making less than $145,000, will have the option of contributing as a Roth or a pre-tax basis. Once effective, both the $10,000 and $145,000 amounts will be indexed for inflation.

Another update of the SECURE 2.0 act is to delay the required minimum distribution age at which participants must begin taking distributions from their retirement accounts, it increased from 72 to 73 on January 1, 2023 and will increase to 75 in 2033.

First State Trust Company is a directed trustee, custodian and paying agent for both traditional Defined Benefit Plans as well as Multiple Employer Plans.

David Draper, Managing Director & COO
Phone: (302) 573-5808 / Email:

The posts expressed are views of FSTC and are not intended as advice or recommendations. For informational purposes only. FSTC does not offer tax or legal advice, professional counsel should be sought for tax or legal advice.

David Draper
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