Fidelity Reveals Top 5 Optional Provisions Plan Sponsors Are Most Likely to Adopt

The increase in catch-up contribution cap for participants aged 60 to 63 and the expanded in-service distribution choices made possible by the SECURE 2.0 Act of 2022 were among the top-ranked optional provisions that advisers might see plan sponsors wanting to adopt, according to respondents from a June survey by Fidelity Investments titled “SECURE 2.0 Optional Provisions Survey Insight.”

Among plan sponsors who considered raising the catch-up contribution limit for participants aged 60 through 63, 88% are likely to adopt this provision when it becomes available for plan years starting in 2025, expressing a strong interest in enabling additional savings features.

Meanwhile, 88% of plan sponsors who have considered self-certification of hardships and unforeseeable emergency distributions as well as withdrawals for federally declared disasters said they were likely to adopt these provisions.

The full responses via Fidelity were:

Six months or more is how long respondents (60%) said they anticipate taking to adopt the optional provisions they have chosen. Four in five respondents thought about utilizing at least one of Fidelity’s own solutions—auto portability, self-certification, and/or student debt match—to facilitate the adoption of SECURE 2.0, according to the country’s largest recordkeeper.

Ninety percent of those surveyed expressed interest in implementing some optional elements, with the greatest interest in implementing provisions in the large and tax-exempt plan areas. Fidelity anticipates that plan sponsors that manage smaller plans will have the lowest adoption rates of provisions.

Employer contributions as a Roth also scored in the top five among plan sponsors of smaller plans, surpassing eligible distributions for victims of domestic violence. The top two categories were withdrawals for emergency needs.

Auto-portability was selected as the best choice by plan sponsors in the manufacturing and finance sectors, while professional, technical and scientific services plan sponsors were more interested in unenrolled member disclosures and withdrawals for emergency expenses.

Fidelity’s surveyed over 300 plan sponsors representing a range of employer sizes and industries.