Chris Nicholls
While many requirements under SECURE 2.0 are already effective, some of the biggest changes that employers must comply with will go into effect on January 1, 2025. This includes the auto-enrollment of employees into new retirement plans at a minimum of 3% of their salary, higher catch-up contribution limits, the ability to offer student loan payment matching and updates to long-term part-time worker retirement eligibility.
While SECURE 2.0 was introduced in 2022 to help employees save for retirement, it has also created greater administrative burdens for HR teams. Starting on January 1, employers must automatically enroll employees into new retirement plans and manage new rules for catch-up contribution limits and plan eligibility, among other requirements.
However, benefit technology company Payroll Integrations has just announced its work with employers to help expedite compliance with new 2025 requirements under the SECURE 2.0 Act. Payroll Integrations removes the administrative burden of manual processes that comes with these new requirements by automating retirement enrollment, eligibility checks and contributions for employees in minutes.
Because the company has pre-built integrations with the largest payroll and benefit providers, including ADP, Quickbooks Online, Empower and Transamerica, employers can transfer data directly from payroll systems and retirement plan providers.
The company’s platform prepares companies for compliance with these new 2025 requirements under SECURE 2.0:
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Matching student loan contributions: SECURE 2.0 allows employers to match employee student loan payments as elective deferrals for the purpose of receiving an employer-matching contribution, allowing employees to receive matching contributions without reducing their take-home pay. Qualified student loan payments can include payments made by an employee for student loans made on behalf of the employee, the employee's spouse, or dependent.
Long-term, part-time employees: One key provision in SECURE 2.0 regards eligibility requirements for long-term, part-time employees: Employees who worked at least 500 hours a year for two consecutive years are eligible for a 401(k) plan, effective for plan years beginning after December 31, 2024.
Catch-up contributions: Under SECURE 2.0, there is increased catch-up contribution limit for active participants in 401(k) plans who turn 60 61, 62 or 63 in a calendar year to $10,000 or 50% more than regular catch-up contribution limits.
Auto-enrollment mandate: SECURE 2.0 mandates that certain employer plans adopt automatic enrollment from 2025, exempting "grandfathered" plans. The initial auto-enrollment default must be between 3% and 10%, and the rate must increase every year by 1%, until the participant hits at least a 10%, and no more than 15%.
SECURE 2.0 was introduced to encourage American workers to save for retirement and improve their financial security. The act makes retirement a priority for employers and employees by extending retirement benefits to more workers and offering greater flexibility in managing retirement accounts. Through Payroll Integrations, employers can connect their retirement offerings with their payroll platform to automate retirement enrollment, eligibility checks and contributions for employees in minutes.
The company’s technology transfers data directly from payroll systems and retirement plan providers to eliminate manual entries, which speeds up auto-enrollment and retirement contribution processes and ensures data is accurate and up-to-date.
With various updates to retirement plan eligibility under SECURE 2.0 due to factors like age and length of employment, employers can run automated eligibility checks for employees through the platform. Payroll Integrations can also keep employers compliant with any future requirements under SECURE 2.0 or with new emerging regulations.
Related: SECURE 2.0 compliance in 2025: preparing employers
“With higher living costs, lingering student loans and more, it’s become harder for workers to save for retirement. SECURE 2.0 is laying a foundation to help employees improve their financial well-being and empower employers to better support them–but it’s not without extra steps on employers’ end,” said Doug Sabella, CEO, Payroll Integrations. “We’re making it easy for employers to comply with SECURE 2.0 requirements and do so quickly as we head into 2025, so they can direct their time and focus on employees’ financial wellness.”
The company’s ability to prepare employers for SECURE 2.0 is an extension of its benefit automation technology that directly connects payroll systems with 401(k) and other benefit providers for 5,000+ companies.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
