SECURE 2.0: what independent TPAs need to know.
The SECURE 2.0 provisions that change day-to-day work for independent 401(k) TPAs, with effective dates, the data each one requires and how to turn them into routine checks.
What SECURE 2.0 changed for TPAs
The SECURE 2.0 Act of 2022 (Division T of the Consolidated Appropriations Act, 2023) made more than 90 changes to retirement plan rules, phased in over several years. Some are optional plan features; some are mandatory and change how a TPA must process data every payroll cycle. This article covers the provisions with the most operational impact for independent 401(k) TPAs.
Figures and dates below are from the statute and IRS guidance cited at the end. Effective dates often depend on the plan year, and final regulations are still arriving for some provisions, so confirm current guidance before applying any rule.
Mandatory changes with operational impact
| Provision | What it requires | Effective | TPA data you need |
|---|---|---|---|
| Roth catch-up (sec. 603) | Catch-ups for participants whose prior-year FICA wages from the employer exceeded the indexed threshold ($150,000 for 2026 determinations) must be designated Roth | 2026 under good-faith compliance after the IRS administrative transition; final regulations generally apply to taxable years beginning after December 31, 2026 | Prior-year Form W-2 Box 3 wages per participant; whether the plan offers Roth |
| Long-term part-time employees (sec. 125) | 401(k) plans must let employees with two consecutive 12-month periods of at least 500 hours (and age 21) make elective deferrals | Plan years beginning after December 31, 2024; periods before 2021 are disregarded | Hours by 12-month period for every employee, including part-time |
| Automatic enrollment for new plans (sec. 101, IRC 414A) | 401(k) and 403(b) plans established after December 29, 2022 must auto-enroll at 3% to 10%, escalating 1% a year to at least 10% (max 15%) | Plan years beginning after December 31, 2024 | Plan establishment date; exemptions (employers under 3 years old, 10 or fewer employees, church and governmental plans) |
| Higher catch-up at ages 60 to 63 (sec. 109) | Catch-up limit for participants who reach age 60, 61, 62 or 63 in the year is the greater of $10,000 (indexed) or 150% of the regular catch-up; $11,250 for 2025 and 2026 | Taxable years beginning after December 31, 2024 | Date of birth; the plan's catch-up provisions |
| Plan amendments (sec. 501) | Plans operate in compliance before amending; amendments generally due by December 31, 2026 for most non-governmental plans | Ongoing | Which optional provisions each plan adopted in operation |
Optional features sponsors may adopt
| Provision | What it allows |
|---|---|
| Increased cash-out limit (sec. 304) | Involuntary cash-out threshold raised from $5,000 to $7,000 for distributions after December 31, 2023 |
| Emergency personal expense distributions (sec. 115) | One distribution per year of up to $1,000, from 2024 |
| Student loan payment matching (sec. 110) | Employer match on qualified student loan payments, from plan years after 2023 |
| Roth employer contributions (sec. 604) | Participants may elect Roth treatment of vested matching and nonelective contributions |
| Pension-linked emergency savings accounts (sec. 127) | A Roth emergency savings account for non-HCEs, from 2024 |
Each adopted feature adds a data element or a transaction type the TPA has to track.
Required minimum distributions
Section 107 raised the required beginning age to 73 for individuals who turn 72 after 2022, and to 75 starting in 2033. Census data must carry date of birth and employment status for correct RMD tracking. See the IRS page on required minimum distributions and our 2026 deadlines.
Turning SECURE 2.0 into checks
- Add prior-year FICA wages to the census request. Without it, the Roth catch-up rule cannot be applied.
- Track hours by 12-month period for every employee, so long-term part-time eligibility can be determined.
- Record each plan's establishment date and size so 414A applicability is clear.
- Validate each payroll file for pre-tax catch-ups from participants above the Roth wage threshold.
- Keep a per-plan list of optional provisions adopted in operation, so amendments match practice.
See how these checks would sit in KinetiPlan on SECURE 2.0 automation, with an honest status of each.
References
- Congress.gov: H.R. 2617, Consolidated Appropriations Act, 2023 (Division T is the SECURE 2.0 Act of 2022)
- IRS news release: final regulations on the Roth catch-up rule and other SECURE 2.0 provisions
- Federal Register: final catch-up contribution regulations (Sept. 16, 2025)
- Federal Register: proposed long-term, part-time employee rules for 401(k) arrangements (Nov. 27, 2023)
- IRS Notice 2024-73: additional guidance on long-term, part-time employees
- IRS Notice 2025-67: 2026 amounts relating to retirement plans
- IRS issue snapshot: 401(k) plan catch-up contribution eligibility
- IRS: Retirement plans startup costs tax credit
- KinetiPlan: 2026 401(k) limits and compliance deadlines
General information for plan professionals, not legal, tax or ERISA advice. Plan documents, elections and later IRS or DOL guidance can change how a rule applies to a specific plan. Dollar figures are for the years stated; check the current year before relying on them.
Common questions
When does the SECURE 2.0 Roth catch-up rule apply?
The IRS administrative transition ended after 2025, so plans must apply the rule in 2026 using a reasonable, good-faith interpretation. The final regulations published in September 2025 generally apply to taxable years beginning after December 31, 2026.
What is the long-term part-time rule for 401(k) plans?
For plan years beginning after December 31, 2024, employees who are at least 21 and have two consecutive 12-month periods with at least 500 hours of service must be allowed to make elective deferrals. Periods before January 1, 2021 are disregarded.
Which new plans must automatically enroll employees?
401(k) and 403(b) plans established after December 29, 2022, for plan years beginning after December 31, 2024, unless an exception applies, such as an employer with 10 or fewer employees or in business for less than three years.
Related articles and tools
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