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With over 90 provisions, the SECURE 2.0 Act has created one of the largest opportunities in history for employers to support their employee’s financial wellness. But the Act is complex, and it’s a lot to manage.
This guide is designed for HR professionals and business owners to help their businesses get the most out of the SECURE 2.0 Act.
What is the SECURE 2.0 Act?
The SECURE 2.0 Act builds on previous legislation to help individuals better save for retirement. It was signed into law in December 2022, and its provisions will continue to take effect through 2025. The Act aims to make employee retirement plans more accessible and simplify the administration of employer-sponsored 401(k) plans. |
Your Opportunity: Leveraging the SECURE 2.0 Act
SECURE 2.0 positions savvy HR and business leaders to create highly competitive 401(k) programs that can help attract and retain employees.
Recent data shows how valuable a 401(k) is to employees:
Based on Betterment at Work’s research, 51% of employees would consider leaving their jobs for a 401(k).
If you add on employer-matching contributions, 57% consider leaving their jobs for a 401(k).
Some of the major SECURE 2.0 provisions that 401(k) plans need to consider include:
401(k) match on student loan payments (Optional)
Automatic enrollment (Required for plans established after 12/29/22)
Automatic escalation (Required for plans established after 12/29/22)
The 2 Ingredients You Need to Make the Most of SECURE 2.0
How do you go about making the most of the 90-plus provisions in the SECURE 2.0 Act, with the goal of increasing the ROI on your 401(k) plan?
Just as a chef needs the right ingredients to cook a dish, a 401(k) plan sponsor needs the right ingredients to optimize their plan. You can make the most of what SECURE 2.0 has to offer by ensuring your 401(k) plan combines:
Technology: Partnering with the right tech platform to offer a modern, high-ROI 401(k) plan.
Insights: Leveraging expert insights to design and implement your plan strategically to attract and retain employees.
Your 401(k) technology partner should be able to:
1. Automate: You shouldn’t have to manually update tasks like auto-enroll and auto-escalation. If you choose to offer matching contributions on student loan payments, make sure your platform has the technology to process those transactions, as well.
Example: Betterment at Work launched an industry-first student loan matching solution for small- and mid-sized employers. Betterment at Work’s Student Loan Management platform automates the day-to-day management of student loan payments and allows for automated student loan matching contributions. |
2. Integrate: Data management has never been more important. With the new SECURE 2.0 provisions, you’ll want to ensure your payroll provider allows you to sync plan participant information seamlessly across data systems.
Betterment at Work recommends integrating data, like hours worked, to facilitate specific SECURE. 2.0 provisions focused on plan participation for long-term, part-time workers. Also, as provisions—such as the mandatory Roth catch-up contribution (which has been delayed until 2026)—go live, your 401(k) platform should be able to process data to help your plan stay in compliance and reduce manual work. Betterment offers integrations with 18 of the major payroll providers and adds new providers as needed.
Your 401(k) partner should also provide you with insights, including:
Updates on SECURE 2.0 facts: It’s important to understand the SECURE 2.0 provisions, so you know how your plan will be impacted—especially as legislation evolves.
Guidance beyond the facts: To create value with your 401(k), your plan partner should help you consider which optional provisions make sense to implement and how you can maximize the benefits of implementing mandatory provisions.
Example: Betterment offers resources to help you determine if 401(k) matching contributions on student loan payments are right for your business or how to set your auto-enrollment and auto-escalation levels. Just as important, look for a partner who can help you send communications to your employees so they understand how to get the most out of your 401(k) plan. |
See How You Can Build a Modern 401(k) Plan
Betterment at Work has created resources to help you increase the ROI on your 401(k) program by leveraging the SECURE 2.0 Act:
Free Email Course: Betterment at Work offers a free, six-month email series called “Beyond the Facts: SECURE 2.0” that guides you through some of the most important SECURE 2.0 decisions business leaders need to make, from implementing provisions to communicating with your employees. Sign up for the email series.
SECURE 2.0 Resource Site: With articles, videos, and guides, Betterment at Work’s content library is designed to brief you on the most important aspects of SECURE 2.0 so you can stay in the know and build a 401(k) that fits into your total rewards program. Access the SECURE 2.0 content library.
While the information provided about SECURE 2.0 is accurate based on Betterment’s current understanding and analysis, the details described in Betterment’s content are subject to change based on additional regulatory guidance. Betterment content should not be considered legal or tax advice.
