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When the original SECURE Act (Setting Every Community Up for Retirement Enhancement) was passed in 2019, it marked one of the most significant updates to U.S. retirement policy in decades. But the story didn’t end there.
In late 2022, Congress passed SECURE 2.0, an ambitious follow-up designed to further expand retirement savings opportunities, encourage employer participation, and modernize workplace retirement plans.
Now, as employers continue to navigate its phased rollouts through 2025 and beyond, understanding what SECURE 2.0 means for your company’s benefits strategy is essential.
At Taylor Benefits Insurance Agency, we help employers adapt to regulatory changes like SECURE 2.0 — ensuring compliance while building more competitive and employee-friendly benefits programs. Here’s what every employer needs to know about how SECURE 2.0 is reshaping retirement benefits and what steps you should take to stay ahead.
The SECURE 2.0 Act was designed with a clear purpose — to help more Americans save for retirement and reduce financial insecurity later in life.
Despite the existence of 401(k)s, IRAs, and other savings vehicles, studies showed that:
Many workers, especially younger and lower-income employees, were not participating in retirement plans.
Small and mid-sized businesses struggled to offer affordable plans.
Employees nearing retirement lacked catch-up opportunities.
SECURE 2.0 aims to fix these gaps through more than 90 provisions, many of which directly impact employers offering (or planning to offer) retirement benefits.
The result? A more inclusive, flexible, and incentivized retirement system, but also more complexity for HR and finance teams.
While the Act includes dozens of updates, several core changes are particularly relevant to employer-sponsored plans.
Let’s explore them in detail.
Beginning in 2025, all new 401(k) and 403(b) plans must automatically enroll eligible employees with a default contribution rate of at least 3%, increasing annually until reaching between 10% and 15% — unless employees opt out.
This automatic enrollment provision is one of the Act’s most transformative features.
Why it matters:
Research shows automatic enrollment dramatically increases participation — especially among younger and lower-income workers.
It helps employers demonstrate commitment to employee financial well-being.
For businesses competing for talent, offering automatic enrollment adds credibility as a modern, inclusive employer.
Exemptions apply for small businesses with fewer than 10 employees, new businesses under three years old, and existing plans established before 2025.
One of the Act’s primary goals is to make it easier — and cheaper — for small businesses to start retirement plans.
Under SECURE 2.0:
Small employers (fewer than 50 employees) can now receive a tax credit equal to 100% of plan startup costs, up to $5,000 per year, for the first three years.
An additional credit is available to offset employer contributions for the first five years (up to $1,000 per employee).
Why it matters:
This dramatically lowers the financial barrier for small businesses to establish plans and compete with larger firms on benefits.
For Taylor Benefits Insurance Agency clients, this provision presents an opportunity to educate smaller employers about how to offer retirement benefits strategically and affordably.
A groundbreaking provision now allows employers to treat student loan payments as elective deferrals for the purpose of employer matching.
In other words, if an employee is paying down student loans instead of contributing to their 401(k), the employer can still make a matching contribution to the retirement plan.
Example:
An employee pays $300 toward student loans in a month. The employer can match that amount into the employee’s retirement account — just as if they had contributed it themselves.
Why it matters:
It helps younger employees save for retirement while managing debt.
It positions employers as empathetic and financially supportive.
It strengthens recruitment and retention among millennial and Gen Z workers.
This feature represents one of the most innovative intersections of financial wellness and retirement planning in recent years.
Employees aged 60 to 63 will soon be allowed to contribute up to $10,000 per year in catch-up contributions (or 50% more than the regular catch-up limit, whichever is greater).
However: For employees earning more than $145,000 annually, catch-up contributions must be made on an after-tax (Roth) basis starting in 2026.
Why it matters:
Older employees can boost their savings significantly before retirement.
Employers should prepare for increased payroll and plan administration complexity due to Roth tracking requirements.
Recognizing that unexpected expenses often derail retirement savings, SECURE 2.0 introduces emergency savings options linked to employer plans.
Key features include:
Employers can offer pension-linked emergency savings accounts (PLESAs), allowing employees to contribute up to $2,500 annually on an after-tax basis.
Withdrawals can be made at any time without penalty.
Why it matters:
This gives employees flexibility while encouraging participation in the broader retirement system — particularly among those who might otherwise avoid saving due to short-term financial pressures.
SECURE 2.0 further reduces the eligibility threshold for part-time employees to participate in 401(k) plans.
Starting in 2025, employees who work at least 500 hours per year for two consecutive years (down from three) must be allowed to contribute.
Why it matters:
This expands inclusion and benefits coverage among gig, seasonal, and part-time workers.
Employers will need to adjust eligibility tracking and payroll systems accordingly.
The Act makes several adjustments to Roth accounts, giving both employers and employees more flexibility:
Employers can now offer Roth SIMPLE and SEP IRAs.
Employees can elect to have matching or nonelective contributions treated as Roth contributions (taxed now, not later).
Why it matters:
Roth options appeal to younger employees and those anticipating higher future tax rates — making your plan more attractive across demographics.
Beyond benefits design, SECURE 2.0 includes multiple administrative simplifications, including:
Reduced penalties for late plan filings.
Automatic rollover expansion for small balances.
Simplified 403(b) rules to align more closely with 401(k) plans.
Optional paper statement elimination if electronic delivery is used.
Why it matters:
Employers can expect smoother administration and reduced compliance risk — especially when supported by a broker or plan consultant.
For employers, SECURE 2.0 represents both a major opportunity and a serious responsibility.
Strengthen your total rewards strategy by integrating financial wellness and retirement readiness.
Compete for top talent by offering cutting-edge, compliant plan features.
Leverage tax credits to reduce implementation costs.
Update plan documents and systems to reflect new provisions.
Educate employees about new options and eligibility rules.
Ensure payroll and recordkeeping are aligned with Roth and contribution changes.
The law’s complexity means employers can’t afford a “set it and forget it” approach — active partnership with benefits advisors and plan administrators is key.
Adapting to SECURE 2.0 doesn’t have to be overwhelming. Employers can take several proactive steps to stay compliant and maximize value.
Assess whether your existing retirement plan aligns with new requirements — especially regarding automatic enrollment, Roth options, and part-time eligibility.
Your broker can help interpret complex provisions, evaluate vendor readiness, and ensure your plan documents and systems are updated correctly.
Taylor Benefits Insurance Agency partners with leading retirement plan providers to help employers modernize offerings efficiently.
Many of the changes — like Roth contributions, student loan matching, and catch-up rules — affect employees directly. Clear communication builds trust and reduces confusion.
If you’re a small business, the available tax credits can make starting or enhancing a retirement plan easier than ever.
Pair retirement plan updates with educational resources that help employees understand saving, budgeting, and debt management — reinforcing the financial wellness culture.
At Taylor Benefits Insurance Agency, we understand that regulatory changes can be both an opportunity and a challenge. Our role is to help employers turn compliance into strategy.
We assist clients by:
Reviewing existing retirement plan structures for SECURE 2.0 readiness.
Coordinating with plan vendors and financial partners to update processes.
Educating HR teams and employees on new features and benefits.
Identifying cost-saving opportunities through tax credits and plan efficiencies.
Whether you manage a small team or a large organization, we ensure your benefits strategy stays compliant, competitive, and future-focused.
The SECURE 2.0 Act represents one of the most significant shifts in workplace retirement policy in years — one that expands access, flexibility, and inclusion for employees while creating new opportunities for employers to lead with innovation.
For forward-thinking organizations, this isn’t just about compliance, it’s about redefining what financial wellness means in the workplace.
At Taylor Benefits Insurance Agency, we help employers use legislation like SECURE 2.0 not as an obstacle, but as a roadmap, guiding them toward smarter, more holistic benefit strategies that align with both people and performance goals.
Because the strongest benefit programs don’t just meet today’s regulations, they anticipate tomorrow’s needs.
The law increases tax incentives to encourage small businesses to create retirement plans. Eligible employers may receive credits that offset a large portion of plan startup costs during the first few years. Additional credits may be available for employer contributions made on behalf of employees. These incentives are designed to make retirement plans more affordable for smaller companies.
Some employers may experience additional administrative responsibilities, especially during implementation periods. Tasks such as updating payroll systems, managing automatic enrollment, and tracking Roth catch up contributions may require additional oversight. However, many providers now offer tools designed to simplify ongoing plan administration.
Todd Taylor oversees most of the marketing and client administration for the agency with help of an incredible team. Todd is a seasoned benefits insurance broker with over 35 years of industry experience. As the Founder and CEO of Taylor Benefits Insurance Agency, Inc., he provides strategic consultations and high-quality support to ensure his clients’ competitive position in the market.
We just started working with Taylor Benefits and could not be happier. Todd gave us quite the education as well as some time saving tools to help us manage our HR and save money too. We are looking forward to a long relationship!”
-Carol, Accounting Manager, recruitment marketing company, Campbell, CA
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