The SECURE 2.0 Act Explained: What Employers Need to Know About New 401(k) Rules
The SECURE 2.0 Act is one of the most impactful pieces of retirement legislation in recent history, reshaping how employers design and manage 401(k) plans. While its name—“Setting Every Community Up for Retirement Enhancement”—may sound technical, the law’s purpose is simple: to make it easier for businesses to offer retirement benefits and easier for employees to save. For employers, understanding what changed and how to take advantage of it can mean the difference between running a basic plan and building a long-term competitive advantage.
At its core, SECURE 2.0 is about accessibility and participation. Beginning in 2025, most new 401(k) and 403(b) plans will be required to automatically enroll eligible employees at a contribution rate between 3% and 10% of pay, with automatic annual increases. This shift is monumental. Automatic enrollment has been shown to dramatically increase participation—especially among younger and lower-income workers who may not take the initiative to enroll on their own. For employers, this means higher plan engagement and stronger participation testing results without additional administrative burden.
The law also brings powerful incentives for small businesses. Under SECURE 2.0, companies with 50 or fewer employees can receive a tax credit covering up to 100% of plan startup costs for the first three years, plus an additional credit of up to $1,000 per employee for employer contributions. These incentives essentially make starting a 401(k) plan—or joining a Pooled Employer Plan (PEP)—a near cost-neutral decision for many small businesses. Larger companies benefit too, with partial credits and the ability to deduct employer contributions as business expenses.
One of the most forward-looking changes in SECURE 2.0 is the introduction of student loan matching. Starting in 2024, employers can match student loan payments as if they were employee 401(k) contributions. This provision recognizes a new financial reality: many employees can’t save for retirement because they’re still paying off education debt. By offering a student loan match, employers can help this group build retirement savings without forcing a trade-off. It’s an innovative benefit that also strengthens recruitment among younger professionals.
SECURE 2.0 also modernizes how employees can save. Employers can now allow matching or nonelective contributions to be made as Roth dollars, giving participants more control over their tax strategy. The Act also introduces optional emergency savings accounts linked to 401(k)s, allowing workers to set aside up to $2,500 in after-tax funds they can access without penalties. Together, these features make retirement plans more flexible, accessible, and relevant to real-world financial challenges.
From a compliance perspective, SECURE 2.0 simplifies several key processes. It raises catch-up contribution limits for older workers, delays required minimum distributions, and reduces administrative headaches by allowing more electronic notices and paperless processes. The cumulative effect is a 401(k) environment that’s more efficient for employers and more user-friendly for employees.
At Apex Wealth Path, our role is to help employers turn legislation into opportunity. We guide businesses through every SECURE 2.0 provision—ensuring plans are structured for compliance while capturing every available tax credit and design advantage. Through our PEP model, we handle the required updates, manage documentation, and educate employees about the new options available to them. Our goal is simple: to make complex legislation work in your favor.
The SECURE 2.0 Act isn’t just about rule changes—it’s about modernization. It reflects a future where retirement plans are more inclusive, automated, and financially rewarding for everyone involved. For employers ready to adapt, this is the moment to create a smarter, more impactful 401(k) strategy.
Stephen Bellosi, AIF®, AWMA®
Managing Partner, Apex Consulting