SECURE 2.0 Act of 2022

Key updates impacting plan sponsors and participants

Thank you for partnering with us as you continue to navigate the provisions of the SECURE 2.0 Act of 2022. We will continue to keep you informed about the latest developments and impacts to your plan and participants. Use these resources to support you as you manage your retirement plans and help employees to prepare for and live in retirement.

Nationwide will be your partner to help implement key provisions

Nationwide Retirement Solutions is managing legislative updates through a SECURE 2.0 Program Team.

Nationwide is continuing to manage a detailed plan as we move through the implementation process for key provisions, including:

Implementing provisions based on their prioritization and/or required timelines
Moving into implementation for optional provisions
Connecting with plan sponsors for the rollout of provisions, where needed

We will continue to partner with you to support you as you implement the new provisions. Please review the provisions below to learn about the mandatory and optional provisions to implement in your plan.

Mandatory Provisions
Section	Provision	Description	Effective Date
SECURE Act 1.0 (Implemented)	Long-term part-time employees	Requires plans to permit employees who work at least 500 hours but less than 1,000 hours in three consecutive 12-month periods to make elective deferrals to 401(k) plans. SECURE 1.0 refers to these workers as long-term part-time employees (LTPT employees). The rules require service from and after January 1, 2021 to be counted, making 2024 the first year that LTPT employees can become eligible to participate under SECURE 1.0.	1/1/24
101 (Implemented)	Expanding auto enrollment in retirement plans	All new 401(k) and 403(b) plans adopted after December 29, 2022 (except businesses with fewer than 10 employees, new businesses less than 3 years old, and churches and governments) must automatically (beginning Jan. 1, 2025) enroll participants at 3 – 10% and increase the rate by 1% per year to at least 10%, but no more than 15%. Employees would have 90 days to opt out and take a distribution of any automatic deferrals. Must have Eligible Automatic Contribution Arrangements (EACAs) withdrawal provision. Does not apply to SIMPLE plans (they’re IRAs), but does apply to adoption of a MEP after enactment date (based on employers adoption, not effective date of MEP).	1/1/25
107 (Implemented – to age 73)	Increase in age for required beginning date for mandatory distributions	Increases the RMD age to 73 for a person who attains age 72 after December 31, 2022, and age 73 before January 1, 2033; 75 for an individual who attains age 74 after December 31, 2032.	1/1/23
125 (Implemented)	Long Term Part Time Workers - 2 year + 403(b) inclusion	Reduces from 3 to 2 the required years of service before long-term, part-time workers are eligible to contribute to a plan. Pre-2021 service is also disregarded for purposes of the vesting of employer contributions (and pre-2023 service is disregarded for eligibility and vesting purposes under the new, SECURE 2.0 part-time employee provision). Extends the long-term part-time coverage rules to 403(b) plans that are subject to ERISA.	1/1/25
311 (Implemented)	Repayment of qualified birth or adoption distribution limited to three years	Requires qualified birth or adoption distributions to be recontributed within three years of the distribution in order to qualify as a rollover contribution.	12/29/22
325 (Implemented)	Roth required minimum distribution	Extends the pre-death RMD exemption to Roth amounts in plans.	1/1/24
329	Modification of eligible age for exemption from early withdrawal penalty	Extends the age 50 exception to the 10% early withdrawal penalty to those qualified public safety employees who have separated from service and have attained age 50 or 25 years of service, whichever comes first.	12/29/22
330	Exemption from early withdrawal penalty for certain state and local government corrections employees	Expands the definition of qualified public safety employee to include certain corrections officers and forensic security employees, thus making them eligible for the age 50 exception to the 10% early withdrawal penalty.	12/29/22
338	Paper benefit statements	Modifies the pension benefit statements requirement to generally require that for a defined contribution plan, at least one statement must be provided on paper in written form for each calendar year; and for a defined benefit plan, at least one statement must be provided on paper every 3 years. Exceptions allowed for plans that allow employees to opt in to e-delivery if the plan follows the 2002 safe harbor. Also directs the Secretary to make changes by December 31, 2024 to the e-delivery rules to include certain participant protections including requiring a one-time initial paper notice, prior to the first pension benefit statement being delivered electronically, informing the participant of their right to receive all required disclosures on paper.	1/1/26
603 (Implemented)	Elected deferrals generally limited to regular contribution limit	For individuals with FICA wages of more than $150,000: Under current law, catch-up contributions to a qualified retirement plan can be made on a pre-tax or Roth basis (if permitted by the plan sponsor). Section 603 provides all age 50 catch-up contributions to qualified retirement plans are subject to Roth tax treatment, effective for taxable years beginning after December 31, 2023. An exception is provided for employees with FICA wages of $150,000 or less (indexed) in the prior calendar year.	1/1/26

SECURE 2.0 Milestones

2021/2022

Industry milestones

1st version of the bill, expanding on Dec. 2019 SECURE Act
The House of Representatives recently passed the Securing a Strong Retirement (SECURE 2.0) Act of 2022
Senate Committee on Health, Education, Labor and Pensions adds Rise & Shine draft
Finance committee approves Enhancing American Retirement Now Act
Congress passes the SECURE 2.0 Act of 2022 on Dec. 23, enacted on Dec. 29, 2022

Nationwide activities

Lobbies on Capitol Hill
Leaders build and amplify support in the industry, continue to draft provisions
Begins operational analysis to prepare, listens and lobbies while Congress continues to shape the bill(s)
Creates cross-functional working team, anticipates IT and operational needs

2023

Industry milestones

The industry seeks technical corrections on key provisions
Industry conferences take place, legal and regulatory specialists contribute
Legal interpretations provided to address the SECURE Act and SECURE 2.0

Nationwide activities

Reviews and unpacks the details of 92 provisions, seeks technical guidance for key provisions
Begins outreach process with plans with steps for implementation
Implements final provisions needed for 2023, continue with provisional planning for 2024 and beyond
Prioritizes mandatory and high-demand provisions
Continues outreach

2024/2025+

Industry milestones

Guidance expected for several key provisions

Nationwide activities

Builds implementation steps for required and optional provisions in 2024 and beyond
Begins outreach process to plans for optional provisions in 2024 and beyond
Follows up with plans for feedback on all SECURE 2.0 provisional implementations

Archived SECURE 2.0 previously communicated content

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Contact your Nationwide Representative with any questions.