Understanding the array of SECURE 2.0 Act provisions and what they allow can be a challenge—we’re here to help. With the year well underway, here’s an update on some key provisions, as well as a preview of what’s to come.
With the year well underway, we’d like to share key provisions of the SECURE 2.0 Act as well as an update of provisions coming. We appreciate working together with you and your TPA implementing these enhancements that impact your plan to strengthen retirement security for your employees.
Due to the mandatory provision requiring catch-up contributions for participants with FICA compensation over $150,000 in 2025 (HIE) to be made as Roth contributions, we have communicated
To help ensure this provision is applied correctly, it’s essential to accurately and timely report eligible HIEs. If you haven’t already reported HIEs that are catch-up eligible, it is important that you do so as soon as possible. We have a Help article on the employer website that walks you through the options to submit the participant information. Navigate to Help in the upper right corner at
If corrections are needed because HIEs were reported late and catch-up contributions were not properly made as Roth contributions, fees may apply. Please keep in mind, not identifying HIEs can result in an operational plan failure.
Effective Jan. 1, 2026, new regulations require participants to receive paper statements as follows:
- Defined contribution (DC) plan participants: Annually
- Defined benefit (DB) plan participants: Every three years
Rest assured, we’re putting processes and procedures in place to comply, and are taking recently proposed DOL eDelivery guidance into account. There are exceptions to the paper statement requirement if the participant consented to electronic delivery, or if a work email address is on file and the participant is expected to read work email as an integral part of their job.
Start-up plans and plans newly adopting elective deferral contributions on or after Dec. 29, 2022, must include an Eligible Automatic Contribution Arrangement (EACA) with some exceptions. We contacted plan sponsors with impacted plans to help ensure the provisions and actions needed to add the EACA characteristics were understood. Plans with mandatory EACA have specific contribution rates that apply for rehired participants. Remember: If an employee returns before a full plan year passes, their automatic enrollment rate continues as if they never left.
- Roth employer matching and nonelective contributions - Legislation allows participants to elect to receive employer matching and nonelective contributions as Roth contributions. We’re monitoring interest and reviewing service solutions, with the goal of accommodating this provision in 2026.
- Qualified long-term care distributions - Effective Jan. 1, 2026, certain plans may offer an optional withdrawal provision that allows participants to pay for certified long-term care insurance premiums once per year without incurring the early penalty tax. Withdrawal amounts are limited to the lesser of the premium, 10% of vested benefit or $2600 (indexed). Participants cannot self-certify and must provide the plan sponsor with a premium statement to proceed.
- The Department of Labor’s (DOL) new Retirement Savings Lost and Found (RSLF) database for DC and DB plans is operational with voluntary participation. We continue to monitor developments.
- The IRS saver’s credit will no longer be refunded to individuals in cash after Dec. 31, 2026. Instead, the Saver’s Match will replace the current Saver’s Credit and provide a federal contribution equal to 50% of up to $2,000 in qualified retirement contributions. The match is deposited directly into the participant’s retirement account, with eligibility based on income. We’re monitoring federal guidance to understand the operational and administrative requirements for plan sponsors and participants. Participation appears voluntary at this time.
- Collective investment trusts (CITs) are permitted to be offered within 403(b) plans; however, additional regulatory updates are required before these investment vehicles can be implemented. We’ll share updates as guidance becomes available.
We understand. There’s a great deal to digest. We’ll continue to work closely with you and your TPA. Be sure to consider any changes you may want to make and reach out to your TPA to discuss. The IRS generally requires that plan documents be amended by Dec. 31, 2026, to reflect any of the legislative provisions implemented.
If you have questions about our process and procedures for implementation, feel free to contact your Principal® representative. For any questions regarding the provisions, changes, or legislative amendments, please reach out to your TPA.
