The SECURE 2.0 Act of 2022 builds upon the original SECURE Act. It delivers a wave of retirement plan enhancements aimed at increasing access, boosting savings capacity, and optimizing retiree flexibility.

The year 2025 marks a significant threshold that many provisions of the law go into effect. As such, it will enable individuals and employers to seize new opportunities for growing retirement portfolios and securing income in later life.

Retirement Plan Enhancements for 2025

Effective January 1, 2025, key elements of the SECURE 2.0 Act, especially Provisions 101 and 109, will come into effect, possibly affecting your retirement plan. Read on to understand the modifications, how to comply with the new requirements, and to see if you need to make adjustments.

1. Provision 101 – Automatic Enrollment and Contribution Increases

This provision impacts 401(k) plans that were initiated on or before December 29, 2022. It’s now mandatory to incorporate automatic enrollment and automatic contribution increase features. However, there are some exceptions.

Recommended Actions
If your 401(k) plan was initiated after December 29, 2022, you should have implement automatic enrollment and escalation by January 1. For assistance, your Third-Party Administrator (TPA) should be able to provide detailed guidance.

2. Provision 109 – Expanded Catch-Up Contributions

This is the second provision for retirement plan enhancements for 2025. Plans that offer catch-up contributions for employees aged 50 and above may now allow “super catch-up contributions” for those turning 60, 61, 62, or 63 within the year. In fact, the IRS has announced a 2025 super catch-up contribution limit of $11,250.

Recommended Actions
If your plan includes catch-up contributions, coordinate with your payroll provider to ensure they can accommodate the increased limits. You should also work with your TPA to update the plan document and other related systems accordingly. By addressing these changes, you can ensure your retirement plan aligns with the new legislative requirements and continues to support your employees’ retirement savings goals.

Get in Touch

An employee benefit plan audit is crucial in maintaining compliance and avoiding potential issues. At The Ray Group, we have an Audit & Assurance team with comprehensive expertise in auditing employee benefit plans. Additionally, our team of dedicated professionals knows how to navigate between client contacts and outsourced service providers. As a result, we can efficiently facilitate a value-added audit.

We are committed to helping companies understand the SECURE Act 2.0 retirement plan enhancements for 2025. Contact our team today to discuss your audit needs.

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