Following months of speculation, SECURE Act 2.0 was passed by Congress on Friday, December 23, 2022, as part of the federal government’s massive $1.7 trillion year-end spending bill. Much like its 2019 predecessor, SECURE Act 2.0 is a comprehensive package of retirement reforms (350 pages) containing numerous changes affecting both IRAs and employer-sponsored retirement plans including the following.

  • Roth contributions for SEP and SIMPLE IRA arrangements
  • Federal matching contributions for qualified savers (IRA and employer-sponsored plans)
  • Significantly increased employer funding opportunities under SIMPLE IRA arrangements
  • Increased catch-up contributions under SIMPLE IRAs and 401(k) plans
  • New “Starter 401(k)” plan option
  • New statutory authority for “Automatic Portability Transactions”
  • New penalty exceptions for early distributions
  • Transition to age 75 for staring required minimum distributions
  • Expanded beneficiary distributions options for special needs trusts
  • Significant increase in small plan start-up tax credit
  • New options for rolling from 529 plans to Roth IRAs
  • Increased limits for Qualified Longevity Annuity Contracts (QLACs)
  • Reduction in the 50% excess accumulation penalty
  • Exemption from RMD requirements for designated Roth contributions (401(k) plans, etc.)
  • Special tax rules for “Qualified Disaster Recovery Distributions”
  • Option to designate certain employer matching/nonelective contributions as designated Roth contributions
  • Mandatory Roth treatment of catch-up contributions for certain high-income plan participant
  • Increased limits for Qualified Longevity Annuity Contracts (QLACs)
  • Reduction in the 50% excess accumulation penalty
  • Exemption from RMD requirements for designated Roth contributions (401(k) plans, etc.)
  • Special tax rules for “Qualified Disaster Recovery Distributions”
  • Option to designated certain employer matching/nonelective contributions as designated Roth contributions
  • Mandatory Roth treatment of catch-up contributions for certain high-income plan participants
  • While some provisions of the Act have a delayed effective date, others will become effective immediately upon enactment.