SECURE 2.0: What Public Service Employers Need to Know

MissionSquare Retirement is your partner in navigating the provisions of the SECURE 2.0 Act of 2022 and optimizing its impact for public service employees.

Actions for Public Service Employers to Take

Take these actions now to align your plan with SECURE 2.0 provisions.

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, 2026. SECURE 2.0 requires this feature for employees making over $145,000 per year.

Secure 2.0 Checkmark

Amend Your Plan to Eliminate the “First Day of the Month” Rule

SECURE 2.0 eliminates the 457(b) “first day of the month” rule and allows deferral rate elections to be made any time prior to the date compensation being deferred is available.

When Do SECURE 2.0 Provisions Take Effect?*

The timing of the new provisions varies. Here's a breakdown of what's in effect 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
  • 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
  • Catch-up contributions must be made on a Roth basis
  • 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.

What Public Service Employers Should Know

Be aware of these important changes as a result of SECURE 2.0.

Changes to Required Minimum Distributions

Beginning in 2023, the penalty for failing to take an RMD decreased to 25% of the RMD amount not taken. The penalty is further reduced to 10% of the missed payment if remedied in a timely manner.

Starting in 2024, Roth accounts in employer retirement plans are exempt from the RMD requirements.

How RMDs Are Impacted

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.
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.
Return to top