The SECURE 2.0 Act, which became law at the end of 2022, made dozens of policy changes designed to encourage people to save for retirement. Various provisions go into effect during 2024 and beyond. While laws and regulations about employee benefits are complex, workplace financial wellness program providers and resource coordinators should collaborate with employer partners to keep up to date on benefits changes to help employees understand their best options for saving or dealing with financial emergencies.
For example, many workplace financial wellness programs offer employees access to emergency financial support through an employer-sponsored small-dollar loan in partnership with a local credit union or other financial institution. These loans help employees cover short-term financial emergencies or other needs that might disrupt their ability to get to work or perform well on the job. At the same time, SECURE 2.0 includes new provisions that allow companies to offer an emergency savings account as part of their 401(k) program. If provided by their employer, employees would be able to access the account to cover unforeseen expenses without incurring taxes or penalties. Participants can contribute until the account reaches a balance of $2,500. If the employer provides matching contributions, these emergency savings would be eligible for the match.
SECURE 2.0 also allows workers to withdraw up to $1,000 per year from retirement funds for emergency expenses without an early withdrawal penalty. The employee must repay the amount of the distribution before making another emergency withdrawal within the next three years.
Provisions in the law also give employers the option to match student loan payments at the same rate as regular elective deferrals and deposit matching contributions into the employee’s retirement account. They may also offer small financial incentives, such as low-dollar gift cards, to boost employee participation in workplace retirement plans. In 2025, additional provisions regarding auto-enrollment in retirement plans and increased “catch-up” contributions for workers nearing retirement go into effect.