Employers Prepare for SECURE 2.0 Provisions Taking Effect in 2025

Category: Federal & State Compliance

Written by Hall Benefits Law on January 29, 2025

Many of the requirements for employers under the SECURE 2.0 Act, which Congress passed in 2022, already have gone into effect. However, some of the major requirements of SECURE 2.0 took effect on January 1, 2025. Specifically, covered employers must automatically enroll employees into new retirement plans, contributing at least three percent of their salary. Individuals will have access to higher-catch-up contribution limits for their retirement plans, and long-term part-time workers will have updated eligibility for retirement plans.

Payroll Integrations, a benefits technology company, has worked with employers to develop a means to expedite and ensure compliance with SECURE 2.0’s 2025 mandatory provisions. The company has developed an automated platform for compliance with all SECURE 2.0 requirements, eliminating manual data entry. The platform integrates automatically with the nation’s largest payroll and benefits providers, including ADP, QuickBooks Online, Empower, and Transamerica. This feature allows employers to transfer data seamlessly and directly from payroll systems and retirement plan providers to the platform. Employers can also use the platform to run automated benefit eligibility checks for employees based on age and length of employment.

The Payroll Integrations platform allows employers an automated option for complying with the following SECURE 2.0 2025 requirements:

  • Matching Student Loan Contributions – Under SECURE 2.0, employers can match qualified employee student loan payments as elective deferrals. This arrangement allows employees to receive employer-matching payments without reducing their take-home pay.
  • Long-Term, Part-Time Employee 401(k) Plan Eligibility – Part-time employees who have worked at least 500 hours annually for two consecutive years are newly eligible to participate in a 401(k) plan.
  • Retirement Catch-Up Contributions – Active retirement plan participants who turn 60, 61, 62, or 63 years of age in a calendar year can make catch-up contributions to their retirement plans of up to $10,000.
  • Auto-Enrollment in Retirement Plans – Certain employer plans must auto-enroll employees in their retirement plans. The initial default enrollment rate must be between three and ten percent of the employee’s salary. The rate must increase by at least one percent each year until the employee reaches at least ten percent but no more than 15 percent of their salary.

The purpose of SECURE 2.0 was to encourage workers to save for retirement, thereby improving their financial security. The new provisions prioritize retirement savings for employers and employees by expanding retirement plan eligibility and contributions.