SECURE Act 2.0
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Provision |
Description of Provision |
Optional or Required? |
| Penalty-Free Withdrawals for Unforeseeable Emergency | One penalty-free (10% not applied) withdrawal of up to $1,000 per year. This may be repaid within 3 years. | Optional |
| Improved Coverage for Part-Time Workers | A long-term part-time employee will be eligible to participate in the plan after completing: (a) one year of service, or (b) three consecutive 12-month periods of service with at least 500 hours of service. | Required |
| Dollar Limit for Mandatory Distributions | The limit on involuntary cash-out distributions will increase from $5,000 to $7,000 | Optional |
| Pensions-Linked Emergency Savings Accounts (ESA) or (PLESA) | Employers may automatically enroll employees into the “linked” account at 3% of compensation, up to $2,500. Detailed annual disclosure required. | Optional |
| Domestic Abuse Withdrawals | 10% early withdrawal penalty does NOT apply. This is limited to $10,000 or 50% of vested balance and can be repaid over 3 years; employee-self-certification. | Optional |
| Use of Retirement Funds in Connection with Federally Declared Disasters | Up to $22,000 (per disaster) may be distributed from a retirement plan. Not subject to 10% penalty. This would be included in income over a three-year period. | Optional |
| Increased Age for RMDs | Age increases from 72 to 73 for RMDs processed in 2023. By 2033, age increased to age 75. | Required |