The SECURE 2.0 Act of 2022 (“SECURE Act 2.0”) is a sweeping piece of retirement legislation with complex new provisions. This week, we highlight a few of the SECURE Act 2.0’s key changes for employer-sponsored 401(k) plans.
Emergency Savings Account
Beginning in 2024, employers can provide an emergency savings account, or ESA, for non-highly compensated employees. This must be funded with Roth contributions.
Increased Involuntary Cashout Limits
The SECURE Act 2.0 also increases involuntary cashout limits from $5,000 to $7,000 starting in 2024. A former employee who maintains a balance in a qualified retirement plan can present complications for plan administrators. Thus, plans may “cash out” former participants without their consent. Learn more - ebglaw.com/insights/secure-act-2-0-what-401k-plan-sponsors-need-to-know/
Increased Catch-Up Contributions
Starting in 2025, individuals ages 60 through 63 years old will be able to make catch-up contributions up to $10,000 annually, and that amount will be indexed to inflation.
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These materials have been provided for informational purposes only and are not intended and should not be construed to constitute legal advice. The content of these materials is copyrighted to Epstein Becker & Green, P.C. EMPLOYMENT LAW THIS WEEK® is a registered trademark of Epstein Becker & Green, P.C. ATTORNEY ADVERTISING.