Retirement SECURE 2.0 Act: Guidance for employers

The SECURE 2.0 Act of 2022 introduces major changes to the retirement savings system to make it easier for Americans to save more money for retirement. The provisions offer a number of benefits for both individuals and employers who are looking to help their employees save for retirement.

The benefits include an increase in the age when retirees have to start taking required minimum distributions (RMDs) from age 72 to 73, the ability to transfer up to $35,000 from a 529 account to a Roth IRA account for the 529’s beneficiary, and assistance for paying down student debt while saving for retirement by allowing employers to make retirement plan matching contributions on employee qualified student loan payments. You can read more about them here and here .

Most retirement plan sponsors (82%), especially those that manage larger plans, believe the changes will positively impact their employees’ ability to save for retirement, according to the latest UBS Workplace Voice report SECURE 2.0 today: How plan sponsors are navigating a new world of provisions and mandates .

Roughly 80-85% of them view the following provisions as benefits: Increased catch-up contribution limit for active participants turning ages 60-63, automatic enrollment requirement for new plans, long-term, part-time employee eligibility, withdrawals for emergency expenses, in-plan emergency savings accounts, and employer match for qualified student loan repayments.

Still, there is a lot of information to digest about these changes, some of which haven’t yet begun to roll out and will require further explanation. With this uncertainty looming, employers are concerned about how SECURE 2.0 will affect their businesses. Will they need more resources to manage retirement plans moving forward (80%)? How will they adapt current retirement plans (77%)? Will the changes affect company profits (75%) or their ability to grow their business (73%)?

More specifically, employers are looking for guidance on things like tax credits that are being made available to small businesses to cover administrative costs, the timeline for when each provision will go into effect, and the distinction between mandatory and optional provisions. More than half are even considering switching retirement plan consultants within the next year to help them navigate these changes.

What’s next for plan sponsors
While speaking with your financial and/or tax Advisor is the best course of action, these next steps can help you prepare for those conversations.

1. Do a deep dive. SECURE 2.0 has 90+ provisions. Some are optional while others are mandatory. There are also tax credits available to cover administrative costs. Review available SECURE 2.0 documentation before connecting with your financial advisor, who can help you better understand the changes and implications for your business.

2. Connect with your employees. Start the conversation by sharing the UBS Chief Investment Office’s article Revisiting the SECURE 2.0 Act with your employees. The article, based on the CIO 2024 retirement guide , highlights the SECURE 2.0 Act provisions that are important to individuals with assets held in employer-sponsored retirement plans and IRAs in 2024.

3. Offer a retirement plan, if you don’t already. UBS Workplace Voice research has shown, time and again, that saving for retirement tops employees’ list of workplace benefits. If you don’t already provide a retirement plan, now is the time to take advantage of the tax credits offered by SECURE 2.0.

4. Learn about your state retirement plan mandate. State retirement mandates are popping up across the country. If you don’t currently have a retirement plan, your business may soon be required to offer an employee retirement savings option, if it does not already. To learn more about the options in your state, visit ubs.com/retirementlandscape. Typically, your business has two ways to comply with these types of laws

• Enroll your employees into a state-sponsored retirement program
• Sponsor a plan of your own through the private market

These are just some of the insights you’ll find in this new edition of UBS Workplace Voice, a research publication series revealing employee attitudes and behaviors regarding the workplace. Access the full report and for any questions, or to learn more about UBS Workplace Wealth Solutions, contact us at UBSWorkplaceSolutions@ubs.com or find us online at www.ubs.com/workplacesolutions .

For information on Retirement Plan Services, please visit our website and read the article SECURE 2.0 Act .

Main contributor: Kerry Breen

This article is for informational and educational purposes only and should not be relied upon as investment advice or the basis for making any investment decisions. The views and opinions expressed may not be those of UBS Financial Services Inc. UBS Financial Services Inc. does not verify and does not guarantee the accuracy or completeness of the information presented.

As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered brokerdealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that you understand the ways in which we conduct business, and that you carefully read the agreements and disclosures that we provide to you about the products or services
we offer. For more information, please review the client relationship summary provided at ubs.com/relationshipsummary, or ask your UBS Financial Advisor for a copy.

UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA. Member SIPC.

Expiration: 7/31/2025 Review Code: IS2403349

Disclaimer