The SECURE 2.0 Act made headlines when it passed in late 2022, but now in 2025, plan sponsors are seeing the real impact. While many changes were designed to phase in over time, this year brings several major provisions into effect. Some are mandatory, others are optional, but all require thoughtful consideration from anyone managing a workplace retirement plan. If you’re responsible for plan administration, compliance, or participant engagement, now is the time to make sure your retirement plan is not only compliant but also well-positioned to meet employee needs.
Secure 2.0 Key Provisions Now in Effect
Expanded Catch-Up Contributions for Ages 60–63
Beginning in 2025, participants aged 60 to 63 are eligible for enhanced catch-up contributions—up to the greater of $10,000 or 150% of the standard age 50+ catch-up amount (indexed). For many plans, this will mean adjusting contribution limits and updating payroll systems to reflect new maximums.
Auto-Enrollment Becomes Mandatory for New Plans
For any new 401(k) or 403(b) plans established after December 29, 2022, automatic enrollment is now required starting in 2025. Plans must enroll participants at a default rate of at least 3%, with annual increases of 1% until reaching at least 10% (but not more than 15%). Sponsors need to make sure systems and communication materials are aligned with this mandate. Plans established before the cutoff are grandfathered.
Student Loan Matching Contributions
Plans may now treat qualified student loan repayments as elective deferrals, allowing for employer matching contributions. While this provision is optional, sponsors offering it will need to coordinate with payroll providers and consider how to substantiate eligible student loan payments.
Roth Catch-Up Delay Offers Brief Reprieve
Originally set for 2024, the rule requiring Roth treatment of catch-up contributions for employees earning more than $145,000 has been delayed until 2026. However, sponsors should begin preparing now, particularly if their recordkeeper systems or plan documents need updates to handle Roth processing.
Emergency Savings Accounts (Optional)
Plans may offer a pension-linked emergency savings account (PLESA), allowing non-highly compensated employees to contribute up to $2,500 in after-tax dollars. Distributions can be taken penalty-free, creating a valuable employee benefit. However, administration may be complex, and few sponsors have implemented it to date.
Action Items for Plan Sponsors in 2025
- Review and Amend Plan Documents to ensure compliance with mandatory provisions such as auto-enrollment.
- Coordinate with Recordkeepers to implement operational changes, especially those involving new contribution limits or student loan matching.
- Communicate Changes Clearly to participants, particularly around catch-up contribution eligibility and the potential for Roth-only contributions in 2026.
- Evaluate Optional Provisions to determine if emergency savings or student loan matching aligns with workforce needs and organizational goals.
Moving Forward with Confidence
SECURE 2.0 brings both complexity and opportunity. While compliance is essential, these changes also open the door to making your retirement plan more accessible, competitive, and tailored to your employees’ financial realities. Staying ahead of the regulations and being proactive in your plan management is one of the best ways to fulfill your fiduciary responsibilities.
At California Pensions, we’re helping plan sponsors across industries navigate these new requirements with clarity and confidence. If you’re unsure how the 2025 rules apply to your plan or need support updating documents or operations, we’re here to help. Contact us today!
