SECURE 2.0: What Public Service Employers Need to Know

On Dec. 29, 2022, the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act was signed into law. SECURE 2.0 is part of the Consolidated Appropriations Act of 2023 and is designed to improve retirement savings options. MissionSquare Retirement applauds its passing and is your partner in navigating its provisions and optimizing its impact for you and your employees.

What Actions Do Employers Need to Take?

Here are the key SECURE 2.0 provisions requiring action now and what you need to know.

Secure 2.0 Checkmark

Review RMD Age Requirements

Starting Jan. 1, 2023, the Required Minimum Distribution age increased to 73 and will continue to increase in the coming years. Increasing the RMD age means funds may continue to grow in a retirement account, enabling retirees to improve their financial future.

Date of Birth RMD Age
Dec. 31, 1950 and earlier No changes to current RMD schedule.
Jan. 1, 1951 to Dec. 31, 1958* 73 years old
Born Jan. 1, 1960 or later 75 years old

*The RMD age for those born in 1959 was not clear in SECURE 2.0. MissionSquare expects regulatory or legislative clarification this year.

Be sure to update your materials to reflect the new requirements. We’ll also be notifying affected employees about the change.

Secure 2.0 Checkmark

Prepare Your Plan for Roth Catch-Up Contribution

If your plan offers catch-up contributions, you’ll need to amend your plan to include Roth age-based catch-up contributions before Jan. 1, 2024. SECURE 2.0 requires this feature for employees making over $145,000 per year.

When Do SECURE 2.0 Provisions Take Effect?*

The timing of the new provisions varies. Here’s a breakdown of what’s starting this year and what’s ahead.
  • RMD age increases
  • RMD excise tax reduction
  • Eliminate the 457(b) "First day of the month" rule
  • Withdrawal for federally declared disasters
  • Exclusion (up to $3,000) for health insurance payments for retired public safety
  • Expansion of 10% additional tax exception for public safety officers at age 50
  • Self-certification for Hardship and Unforeseeable Emergency Distributions
  • Catch-up contributions must be made on a Roth basis
  • Exemption of pre-death RMDs from Roth accounts
  • Surviving spouse treated as the employee
  • Penalty-free withdrawals for domestic abuse victims
  • EPCRS: Safe harbor for corrections of automatic deferral failures
  • Treatment of student loan payments as elective deferrals for purposes of matching contributions
  • Withdrawals for certain emergency expenses
  • Emergency savings accounts linked to individual account plans
  • Updating dollar limits for mandatory distributions
  • Exemption for certain auto-portability transactions
  • Rollovers from 529 plans to Roth IRAs
  • Higher catch-up contribution limit to apply for ages 60 to 63
  • EPCRS: Expansion
  • Reduced service requirement for long-term, part-time employees
  • Saver’s Credit and promotion of Saver’s Credit
  • Plan amendments
*Effective dates are generalized for illustrative purposes and vary depending on the provision.

SECURE 2.0 Resources
We’ve reviewed SECURE 2.0 through the lens of public service employers, identifying the provisions and opportunities unique to you and your employees.

SECURE 2.0 Implementation Webinar

Recorded Webinar: SECURE 2.0 – 2023 Governmental Plan Implementation

Uncover frequently asked questions and learn about implementation for the industry and your governmental retirement plan.

Watch Now

SECURE 2.0 Webinar

Recorded Webinar: SECURE 2.0 Is Now Law – What Governmental Plans Need to Know

Learn how the new improvements and effective mandates enhance your governmental retirement plan and what changes are coming next.

Watch Now

Secure 2.0 Articles

Washington Perspective: SECURE 2.0 Articles

Read our commentary on the passage of SECURE 2.0 in the Washington Perspective, where we regularly share perspectives on policies and legislation affecting you and your employees.

Read the Latest

MissionSquare Retirement does not offer specific tax or legal advice. The information presented here is for educational purposes only and is not to be construed or relied upon as investment advice. It is recommended that individuals consult with their personal finance advisor prior to implementing any financial or tax strategy.
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