Top Secure 2.0 Updates

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As SECURE 2.0 continues reshaping retirement plans, plan sponsors are evaluating several key provisions to enhance participant benefits. A recent Fidelity survey revealed four popular updates that sponsors are thinking about adopting.

1. Increased Catch-Up Contribution Limit

Starting in 2025, participants aged 60 to 63 can contribute up to $10,000 or 150% of the current age-50 catch-up limit, whichever is greater. This change aims to help older workers boost their retirement savings as they approach retirement.

With 58% of plan sponsors planning to adopt this provision, it’s one of the most anticipated updates for enhancing retirement readiness.

2. Self-Certification for Hardship Withdrawals

The Self-Certification for Hardship Withdrawals provision allows employees to declare financial hardships without submitting supporting documentation upfront. This simplifies the withdrawal process, making it easier for participants to access funds when needed.

However, many plan sponsors are waiting for IRS guidance before fully adopting this feature to ensure compliance with regulatory standards.

3. Disaster Relief Withdrawal Provision

Participants affected by federally declared disasters can take penalty-free withdrawals of up to $22,000, with a three-year repayment option under this provision.

Although fewer plan sponsors have adopted this provision so far, interest is growing as more sponsors recognize its potential to support employees facing unexpected crises.

4. Domestic Abuse Withdrawal Provision

Participants experiencing domestic abuse can make penalty-free withdrawals from their retirement accounts under this provision. Initially supported by 42% of plan sponsors, interest increased to 76% after sponsors learned how this feature could help at-risk individuals regain financial stability.

These SECURE 2.0 provisions offer new ways for plan sponsors to improve participant financial security and flexibility. While some features, like increased catch-up contributions, are already gaining traction, others await further IRS guidance. By adopting these updates, plan sponsors can strengthen their retirement plans while addressing participants’ evolving needs.

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