Part V | The SECURE Act 2.0: What You Need to Know

Feb 16, 2023

Below is part five of our five-part blog series on the Act.  Previous posts are available at

The SECURE 2.0 Act of 2022 (the Act) was signed into law by President Biden on December 29, 2022 as part of the Consolidated Appropriations Act of 2023. Most of the Act’s provisions are intended to enhance coverage and participation in 401(k) and similar-type plans, such as a 403(b), particularly among small businesses that currently do not offer a retirement plan and industries that employ large swaths of part-time workers. There are some other provisions that apply to cash balance defined benefit plans and many others that impact all types of retirement plans.

A Deeper Dive: Provisions that simplify and clarify certain rules and administrative concerns
Provision Effective Date Summary
Periodic Paper Benefit Statements Plan years beginning after December 31, 2025 A paper benefit statement must be provided once per year for an individual account and at least every three calendar years for a defined benefit plan (unless the plan follows the DOL electronic delivery rules or the participant /beneficiary requests electronic statements).
Recovery of Overpayments Date of enactment Retirement plan fiduciaries have statutory discretion over whether to seek recoupment of overpayments from participants. The Plan Sponsor is not required to make up overpayments under certain circumstances. In addition, if a plan seeks recovery of overpayments, certain restrictions and employee protections will apply, including no recoupment of interest from participants, limits on recoupment from future benefit payments in excess of 10% of the payments, and notification within three years of the overpayment (except in cases of misrepresentation). Overpayments that have been rolled over and not repaid will still be treated as eligible rollover distributions.
Employee Plans Compliance Resolution System (EPCRS) Date of enactment EPCRS expands the ability of plans to self-correct certain failures, including plan loan failures and any eligible inadvertent failure (a failure that occurs in spite of having practices and procedures to comply with the applicable Internal Revenue Code requirement violated).
Safe Harbor Corrections for Automatic Enrollment and Automatic Escalation Failures 2024 The Act offers palatable safe harbor fixes for plans that fail to timely auto enroll employees or escalate salary deferrals.
Retirement Savings Lost and Found Within 2 years of enactment The DOL is directed to establish an online searchable database within two years that will allow a participant or beneficiary to search for contact information for plan administrators of plans in which the participant or beneficiary may have a benefit. Plans will be required to share information with the DOL to be included in the database.
Streamline Notice Requirements to Unenrolled Employees Plan years beginning after December 31, 2022 Plans will no longer need to provide certain notices to employees who have not elected to enroll. Instead, plans will be required to provide an annual notice reminding the employee of eligibility to participate in the plan and include any deadlines to enroll.
403(b) Plan Investments Date of enactment 403(b) plans are permitted to invest in collective investment trusts, which are often available at a lower cost than mutual funds. However, corresponding changes in applicable securities laws were not included in the Act which means that further legislative action is likely necessary before 403(b) plans may take advantage of this change.
Changes to Family Attribution Rules 2024 Spousal ownership attribution rules will not apply to spouses with separate businesses in community property states. Ownership attribution rules will not apply to minor children. This change will affect the control group rules, which can be a complex analysis for individuals who own multiple trades or businesses.
TopHeavy Requirements P lan years beginning in 2024 Defined contribution plans that cover otherwise excludable employees (i.e., those under age 21 or who have not completed a year of service) are not required to provide top-heavy minimum allocations to early plan entrants for plan years beginning in 2024.
Expansion of 1042 Elections 2028 Beginning in 2028, owners of an Scorporation maydefer recognizing taxable income on the sale of company stock to an ESOP that owns at least 30% of the corporation’s stock if sales proceeds are reinvested into qualified replacement property. However, unlike C- corporations, only 10% of the proceeds of the sale to an S corporation ESOP may be deferred.

A few Other Tidbits from the IRS and DOL
  • The IRS is instructed to issue guidance within two years to improve the rollover process for retirement plans
  • The DOL is reviewing fiduciary standards for annuity purchases associated with pension risk transfers
  • The DOL is looking at improving fee disclosures within the next three years
  • The IRS and DOL have been charged with issuing regulations for consolidating various plan notices within the next two years

Questions or concerns about the new legislation? Contact your financial advisor or BPAS Participant Services.

We are providing this summary to our clients as a courtesy based on our understanding of the new legislation. We have tried to be as thorough as possible summarizing the provisions we believe are most likely to impact our clients, partners, and services. We reserve the right to update any of the above information above based on our continued review of the legislation and/or clarifying guidance that may be issued.