Increase the age for required minimum distributions The provision is set to take effect after December 31, 2023.ģ. That would ensure the employee is building retirement savings no matter what. Secure 2.0 now lets employers make a matching contribution to an employee’s retirement plan based on their qualified student loan payments. When you have to pay down student loan debt, it makes it harder to save for retirement. Allow employer contributions for student loan payments The provision will go into effect after December 31, 2024.Ģ.
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This Secure 2.0 provision will require employers to set a default contribution rate of at least 3% but not more than 10% for the employee plus an automatic contribution escalation of 1% per year up to a maximum contribution rate of at least 10% but not more than 15%. (It is currently optional for employers to do so.) It will then be up to employees to actively opt out if they don’t wish to participate. Most employers starting new workplace retirement savings plans will be required to automatically enroll employees in the plan. Here’s a look at seven of the Secure 2.0 provisions, based on a breakdown from the Senate Finance Committee.ġ. “ will help increase savings, ensure greater access to workplace retirement plans, and provide more workers with an opportunity to receive a secure stream of income in retirement,” said Thasunda Brown Duckett, president and CEO of TIAA, one of the largest US retirement service providers. There will soon be new retirement rules in place that will make it easier for Americans to accumulate retirement savings – and make it less costly to withdraw them – now that lawmakers have passed an omnibus spending package, which President Joe Biden is expected to sign next week.Ĭollectively the retirement savings provisions in that package are known as Secure 2.0.
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