SECURE 2.0 overview

A brief summary for 401(k) plan sponsors and participants

The SECURE 2.0 Act has already made significant changes to the way U.S. retirement plans operate—and more are on the horizon.

Passed in 2022, SECURE 2.0 expands on the SECURE Act of 2019, also known as the Setting Every Community Up for Retirement Enhancement Act. SECURE 2.0 includes more than 90 provisions that aim to help people reach their retirement goals by expanding enrollment and offering incentives to save.

These changes will have significant implications for plan sponsors and participants—but you don’t have to navigate them on your own. We’re here to guide you through the important steps. Our resources below outline what you can expect when more changes go into effect in 2024 and beyond.

What do I need to know about upcoming changes?

If you’re a plan sponsor, you'll need to not only be aware of future changes, but also implement some of them at your business. Here are two of the biggest provisions you’ll need to be ready for:

Long-term, part-time employees

Under the SECURE Act of 2019, you must allow eligible long-term, part-time (LTPT) employees to make 401(k) contributions—effective for your 2024 plan year.

This means that employees who complete at least 500 hours of service in three consecutive 12-month periods satisfy your plan’s service requirement and can make contributions to your 401(k) plan.

Under SECURE 2.0, this will change again in 2025—employees who complete at least 500 hours of service in two consecutive 12-month periods (versus three consecutive 12-month periods in 2024) will satisfy your plan’s service requirement.

If you’re a Sentry customer, please report your long-term, part-time employees to us as you identify and enroll them into your plan.

Roth catch-up contribution changes

Your 401(k) plan likely already allows for catch-up contributions, which are additional 401(k) contributions made by employees who are at least 50 years old and have exceeded the $22,500 contributions limit for 2023.

Catch-up eligible employees can contribute an additional $7,500 to their 401(k) accounts in 2023. Contribution limits are subject to change every year and may be different in 2024.

Under SECURE 2.0, any employee who earned more than $145,000 (amount subject to change on a yearly basis) in FICA wages from you the prior calendar year must make catch-up contributions on a Roth basis starting January 2026.

Catch-up eligible employees who earned $145,000 or less in the prior year can continue to make catch-up contributions on a pre-tax or Roth basis.

Originally effective in January 2024, this provision was delayed until January 2026 by IRS Notice 2023-62. This two-year administrative transition period gives plans sponsors and their payroll vendor more time to prepare for this provision.

When can I expect these changes?

Here’s a brief overview of some of the mandatory changes included in SECURE 2.0.

Please note that some changes included in the SECURE Act of 2019 have been or will be changed again under SECURE 2.0. View this timeline to see significant voluntary changes as well.

Secure 2.0 Act 401(k) changes for businesses timeline

Watch our SECURE 2.0 webinar

These changes can be complicated, and we want to help ensure you’re equipped to handle them. We encourage you to view our webinar for a more in-depth look at SECURE 2.0.

Frequently asked questions

Below, you’ll find answers to common SECURE 2.0 questions. For more, view the full list of questions.

How is SECURE 2.0 going to affect my plan?

This act includes changes focused on expanding coverage, increasing employee savings, and allowing additional options for participants to access their savings.

Some provisions went into effect in 2022, while others will continue to go into effect through 2033. Some of the changes are voluntary, others are mandatory.

In many cases, further guidance from the IRS and U.S. Department of Labor (DOL) is required to fully understand and implement many of SECURE 2.0’s provisions.

You should contact your Client Services Manager with any questions.

Will there be a cost to make the plan changes?

Sentry doesn’t charge for amendments. However, many of the provisions may increase your plan’s administrative costs in a way that isn’t clear at this point in time. Additionally, fees may be assessed by your payroll provider or other service providers.

As a plan sponsor and participant, how are we made aware of requirements?

Sentry provides ongoing support, including participant enrollment materials, email communications, notice preparation, and employee education.

We’ll notify you as additional guidance from the IRS and U.S. Department of Labor (DOL) on SECURE 2.0 becomes available.

Who is considered a long-term, part-time (LTPT) employee?

The original SECURE Act (passed in 2019) requires that you must allow LTPT to make 401(k) contributions under your plan. The act defines a LTPT employee as someone who worked 500 hours or more in each of the three consecutive 12-month periods prior to 2024 and meets the plan age requirement.

SECURE 2.0 Act redefined LTPT to an employee who worked 500 hours or more in each of the two consecutive 12-month periods—effective starting in 2025.

Does SECURE 2.0 require that catch-up contributions be made on a Roth basis?

Yes. Under SECURE 2.0, higher-income employees must make catch-up contributions on a Roth basis.

This provision was originally set to take effect in 2024. However, the IRS announced on August 25, 2023, that the effective date would be pushed back to 2026. The two-year administrative transition period will allow the time necessary for plan sponsors and their payroll vendors to comply with this new rule.

More information on SECURE 2.0

Explore the websites below for more information from government agencies and other organizations.

Internal Revenue Service
View website

United States Senate Committee on Finance
View website

American Society of Pension Professionals & Actuaries
View website

What if I have more questions?

If you have a question about SECURE 2.0 or Sentry’s other 401(k) services, send us an email.

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