When the SECURE [Setting Every Community Up for Retirement Enhancement] 2.0 Act passed in 2022, advisers, plan sponsors and recordkeepers embarked on a long road of implementation. Although some aspects of the legislation immediately took effect, others have implementation dates in 2025 and beyond. The result has been years of conversations and planning about the legislation. Some advisers are ready to move on.   

“Before [SECURE 2.0] got passed, we were talking about it. Then, it got passed and we were talking about it. Here we are a couple of years later still talking about it,” says Jania Stout, president at Prime Capital Financial. “The fatigue has set in.”   

Unfortunately, advisers and others in the industry still have work to do. Provisions such as the increased catch-up contribution limits for employees age 60 through 63 take effect this year, and along with them comes the potential for administrative headaches.  

The State of SECURE 2.0 Implementation   

When the legislation first passed, some of the provisions released right away that required a technology build from the recordkeeper were ambitious, says Sean Kelly, financial adviser and vice president for Heffernan Financial Services. An example is the allowance for employers to offer employees the ability to receive a contribution match in Roth dollars, which requires extra calculations. Similarly, the new rule requiring higher-income earners to make catch-up contributions with after-tax money was postponed until 2026 amid implementation challenges.    

But now that plan sponsors are in the thick of it, and advisers have had years to parse through the details, implementation is well underway—at least for the provisions that are required. While clients and recordkeepers have implemented the mandatory provisions, says Bruce Lanser, senior retirement plan consultant at UBS, some of the optional provisions are still being evaluated.  

“Some plan sponsors are taking a ‘wait and see’ approach until the mandatory provisions have all been implemented and digested,” Lanser says, adding that they want to let others be the first movers and see the bugs get worked out of the system before they adopt.  

Nevertheless, there are some optional provisions that have been adopted, including those that allow for victims of domestic abuse, disasters or a terminal illness to make withdrawals, he says.  

What Advisers Are Excited to Bring Plan Sponsors 

Kelly says he still sees SECURE 2.0 as an opportunity as it allows advisers to provide their expertise to clients regarding how and which provisions to implement. Some of the components of the act he’s most excited about are the short-term small distributions that employers can opt to turn on. For example, under the new rules, participants may choose to take penalty-free distributions of up to $1,000 over a three-year period without claiming hardship. Employers may also choose to give employees the option to fund their emergency savings up to $2,500 while still saving for retirement.  

 “When I look at the plans that I partner with clients on and I see anything that can lessen the amount of loans taken out, I like that because they’re not depleting their retirement savings,” Kelly says.  

 Lanser says he believes the most exciting opportunity is the provision that allows employers to match employees’ student loan repayments.   

 “When a pharmaceutical company first made the news for offering the match, it generated a lot of excitement,” he says. “Now that any company has the ability to help with student loan repayment, it presents a real opportunity for us to do even more to help participants.”  

 Administrative Challenges  

 Many players aid in the process of ensuring retirement savers have all the knowledge and tools they need to make contributions. That comes with challenges, especially since advisers’ clients may work with a range of recordkeepers that have different processes for adopting or implementing these provisions. One recordkeeper may automatically add a provision with an opt-out feature, while another could require a sign-off on an amendment for the provision to be included in a saver’s plan.  

 “The challenge for advisers right now is [to] have a grid of all the recordkeepers and how they are applying different provisions and then keeping track of … because we’ve been talking to our clients about this for several years now … what each particular client wanted and didn’t want to adopt,” Stout says.  

 Take the increased contribution limit that some older employees are able to capitalize on this year.  

 “That’s something we have to make sure our clients are ready for,” Stout says. “We have to make sure that we can communicate it properly, that plan sponsors are aware of it and they’re letting their employees know, because we don’t want to get to the end of 2025 and have an employee say, ‘Hey, I didn’t know that I could have put more money away.’”  

She also sees hurdles around the provision meant to help retirement savers increase their emergency savings. While there are some organizations for which this provision will be positive, the overall appetite from plan sponsors has been low, likely due to bandwidth around a communications and administrative perspective. Census data files need to be updated to have this additional source, for instance.   

“Conceptually, if you present these provisions and new opportunities and resources to employers, most of them are like, “That sounds great and we would love to offer that to employees,’” Kelly says. “But there’s always the operational side of how you make it work.”  

More on this topic:

	SECURE 2.0 Auto-Enrollment Requirement Takes Effect in 2025
	Is SECURE 3.0 on the Horizon?
	What to Know About Part-Time Employee Eligibility for Retirement Plans
	Understanding SECURE 2.0 Student Loan Matching and Educational Benefits
	SECURE 2.0 Provisions Should Boost Adviser Revenue in 2025