SECURE Act 2.0: 2025 Changes for Small Business 401(k) Plans
The SECURE 2.0 Act of 2022 (SECURE 2.0) introduced major changes to 401(k) plans, especially for small businesses. Three major changes take effect for plan years beginning after December 31, 2024 (January 1, 2025 for a calendar-based plan). They relate to automatic enrollment, long-term part-time eligibility, and catch-up contributions. As a small business owner, it’s crucial to understand the changes to ensure your 401(k) plan is compliant. Below we break down the SECURE 2.0 changes that will affect 401(k) plans for 2025, including practical steps to meet their requirements. If you need further assistance, contact your 401(k) provider. Automatic Enrollment in New Plans Automatic enrollment is a 401(k) plan feature that automatically enrolls eligible employees at a preset default contribution rate, unless they actively opt out . The feature aims to simplify participation and increase retirement savings rates among employees. What’s New for 2025 SECURE 2.0 requires new ...