Law & Order

U.S. Congress Makes Changes to Retirement Laws

By SEMA Washington, D.C., Staff

SEMA-supported bipartisan retirement plan legislation was enacted into law as part of the FY 2023 omnibus spending package. Referred to as the SECURE Act 2.0, the provisions expand the SECURE Act 1.0 reforms enacted in 2019. The revisions include:

  • Automatic Enrollment: starting in 2025, any 401(k) or 403(b) plans established after December 29, 2022 will be required to automatically enroll workers at between 3% and 10% of pay, unless the employee chooses to opt-out. The savings rate will then increase by 1 percentage point a year until it hits 10% to 15%. The intent of the provision is to expand retirement plan participation.
  • Catch-Up Contributions: Catch-up limits for workers contributing to their 401(k) accounts who are 50 years and older will rise in 2023 to an extra $7,500 a year. The limit will rise to at least $10,000 a year for people 60 to 63 starting in 2025. The catch-up limits are also subject to inflation adjustments.
  • Tax Credits for Small Employers: Starting in 2023, employers with 50 or fewer employees, can qualify for a start-up tax credit of 100%, which was previously 50%.
  • Required Withdrawal: the age at which people must start withdrawing money from a retirement account has been raised from 72 to 73 starting on January 1, 2023, and to 75 starting on Jan. 1, 2033.

For more information, contact Eric Snyder at