On December 29, 2022 the SECURE 2.0 Act was signed into law by President Biden as part of the Consolidate Appropriations Act of 2023 (HR 2617).  It contains 92 provisions affecting United States retirement savings plans. Secure 2.0 is built upon the 2019 SECURE (Setting Every Community Up for Retirement Enhancement) Act that was signed by President Trump in December 2019. 

The original legislation created changes for long-term retirement savings for Americans of every age. The new provisions in SECURE 2.0 is designed to make it more attractive for employers to offer retirement plans and easier for all employees to start saving.

Disclaimer: The information in the documents may not be construed or used as legal advice about the content, interpretation or application of any law, regulation, or regulatory guideline. Customers and prospective customers must seek their own legal counsel to understand the applicability of the law or regulation.

The PeopleSoft Benefits Team has been reviewing the Act and researching the requirements of the new legislation. Here is a link to the actual bill – BILLS-117hr2617enr.pdf (congress.gov). There are many professional sites that you can use to do your own research. There is a lot of information regarding the new requirements so I would highly encourage each of you review the information and use your own legal and financial professionals to create your company’s strategy for implementing these new requirements.

Some of the legislation may require you to make changes to your existing plans and offerings. Also, new plans may have different rules than your older plans that may be grandfathered in. Of the 92 provisions, many do not affect the enrollment and collection of funds and thus will not be addressed by the PeopleSoft Benefits product. For instance there are changes and age nuances to Required Minimum Distribution (RMD) and modifications to penalties and hardship distributions that you will want to understand.

There are a number of major areas that we are researching to determine if any enhancements will be needed to our current functionality. These include: 

  • Retirement Plan Emergency Savings Accounts
  • New Catch-up Contribution Requirements
  • Part-time Employees Eligibility
  • Auto Enrollment 

Based on our understanding of the Act at this time, much of our current functionality and flexible setup features may meet the basic requirements outlined in the Act. If this continues to hold true, we will be looking to provide additional documentation to assist you in understanding possible configuration options. This may include a recap of how the Activity Guide Composer works so that you can set up your own “events” for employees to waive or change their deduction amount. This may be very useful for automating some of the Part-time Employees and Auto Enrollment requirements.  

It is also important to realize that some of the provisions of the Act are voluntary. Where voluntary functionality is not available, we will consider new enhancements based on a number of factors including Ideas Lab votes.

At this point, we have not identified any new functionality that we can discuss nor have we ruled out anything as well. It is still too early for us to know. We will be working with internal and external professionals and waiting for legislative guidance and direction to understand some of the rules. It will be important for those customers that do not license Benefits Administration to understand that not all enhancements may be a part of Base Benefits.

We have posted a Position Paper on SECURE 2.0.  It will be updated once we have confirmed changes, if any, we expect to make to PeopleSoft applications to help you comply with the SECURE 2.0 Act.

So stay tuned and follow our blogs. We will provide updates once we get more information and direction from the federal government. I’m sure there will be much more to come.