Legislation & Secure 2.0

Ready to stay compliant and informed on the latest 401(k) happenings? Use this resource to explore key updates on the SECURE 2.0 Act and mandates, learn how you can ensure your retirement plans comply with state laws, and discover the benefits of a Ubiquity 401(k) versus a state-run plan.
why ubiquity

How are Small Businesses Empowered by Secure 2.0?

This act transforms the retirement plan landscape for small businesses by providing resources that turn 401(k) challenges into advantageous opportunities. With tax benefits, added flexibility, and other significant incentives, this legislation will help enhance retirement benefits, keep employer and employee needs at the forefront, and ensure people can build the future they want.

Key benefits of Secure 2.0
Auto-enrollment for plans
Increased tax credits
50% Savers Match for eligible employees
Penalty-free emergency savings withdrawals
Higher catch-up contributions
Increased force-out threshold
Certified hardships

Important Secure 2.0 Details

As you start deciding between a 401(k) with a private provider like Ubiquity or a state-run plan, here are some other important Secure 2.0 details to keep in mind.

Automatic enrollment

Employers adopting new 403(b), or 401(k) plans are now required to include an auto-enrollment feature that sets participants up to contribute 3% of their total compensation toward retirement each year. These contributions will automatically increase by 1% per year to a maximum of 10%.

Employees still retain the right to opt out, though very few workers actually do. Existing plans will be grandfathered, except for those established on or after 12/29/2022. These ones will need to update their provisions to ensure they align with requirements.

Non-exempt 401(k) plans established by December 29, 2022, must include automatic enrollment by December 1, 2025. There are a few exceptions to this, including if a business has 10 or fewer employees and/or has been operating for less than three years.

Eligibility

The original SECURE Act required long-term, part-time workers to be eligible for retirement plan participation if they have worked 500+ hours per year over the last three plan years, starting in 2021. Secure 2.0 goes one step further, shortening the period from three to two years, beginning in 2025.

Required minimum distributions (RMDs)

Previously, Americans aged 72 and older had begun taking distributions from their retirement plans. This age increased from 70.5 under the original SECURE Act, starting in 2020. However, over a quarter of seniors ages 65-74 and 6.6% of those age 75 and older are still participating in the workforce.

But now, under Secure 2.0, Americans may delay taking distributions in the following ways:

– For individuals who reach age 72 after December 31, 2022, and reach age 73 before January 1, 2033, they must start taking distributions at age 73

– For individuals who reach age 74 after December 31, 2032, they must start taking distributions at age 75

Additionally, certain plan objectives aim to simplify administration and reduce total plan costs. Under the new proposal, certain disclosure requirements are eased. Excise taxes for failure to make RMDs are reduced from 50% to 25%.

Catch-up contributions

Many people want to contribute more as retirement draws near. Participants in 401(k) and 403(b) plans can make additional catch-up contributions starting at age 50. This helps late starters save quicker, above and beyond the annual limit.

Beginning in 2025, plan participants will have the option to increase catch-up contributions from the current $7,500 (indexed annually) to 150% of the annual catch-up limit per year for those ages 62, 63, and 64. At age 65, the $7,500 allowance returns. These figures may be adjusted for cost-of-living increases.

Roth options

Effective January 1, 2026, participants with over $145,000 in income will only have the option to contribute their catch-up as Roth – meaning that plan participants pay taxes on them now, but pay no taxes at withdrawal time.

Effective immediately upon adoption, plan sponsors may offer employees the option to put their matching contributions into Roth accounts.

Multiple employer plans

While the original SECURE Act made it easier for small business employers offering 401(k)s to band together in a single plan, Secure 2.0 makes 403(b) plans eligible to participate in Multiple Employer Plans (MEPs). Professional service providers take over the administrative burden, rather than individual employers.

Saver’s credit

The Retirement Savings Contributions Credit (Saver’s Credit) gives low and middle-income individuals a tax credit worth up to $1,000 for making eligible contributions to an employer-sponsored retirement plan or IRA. Secure 2.0 raises the rate of the credit to 50% of what is contributed and increases the maximum credit to $2,000. It’s important to note that there will be a phase-out that’s income-based and will impact this.

Small business tax credits

For small business retirement plans with 50 or fewer participants, a tax credit worth 100% of the employer’s administrative expenses (to a maximum of $5,000) for the first three years is available. This is changed from the previous tax credit of 50% of the administrative costs (also capped at $5,000).

A brand-new tax credit for enterprises with 50 or fewer workers allows them to receive up to 100% of the amount they contribute on each employee’s behalf – capped at $1,000 per person. Businesses with 51-100 employees would receive a tax credit worth 100% of their contributions per employee in the first and second years, 75% in the third year, 50% in the fourth year, and 25% in the fifth year.

The $500/year auto-enrollment tax credit still applies for the first three years of a new plan as well.

Lost benefits

Within three years of the enactment of Secure 2.0, the Labor, Treasury, and Commerce departments will coordinate a publicly searchable database for lost participant benefits. This repository of last resort for lost, uncashed retirement distribution checks could help people locate missing money they’d lost or forgotten about when changing jobs.

Secure 2.0 has increased the cap on mandatory distributions from $5,000 to $7,000. Under current rules, beneficiaries with accounts worth over $5,000 must consent to a distribution – either through a direct rollover to another account or a cash check. If the value is worth more than $1,000 and consent is not given, the benefit must be transferred to an IRA or other investment vehicle as designated by the plan administrator. With Secure 2.0, the information to locate smaller balances would be transferred to the Office of the Retirement Savings Lost and Found if a non-responsive participant cannot be reached to accept the distribution.

Mandate active
Mandate proposed
No mandate
Alabama
There are no active or pending mandates requiring companies to offer a retirement plan.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Alaska
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Arizona
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Arkansas
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
California
Companies with 1-4 employees are mandated to offer an IRA or 401(k) plan.  Enroll by December 31, 2025 to avoid penalties.
Mandate details
Penalties
Employers will incur a penalty of $250 per eligible employee for noncompliance that lasts 90 days or more beyond the issued notice. Should noncompliance continue for 180 days or more after the notice, an additional penalty of $500 per eligible employee will be imposed.
Companies that must comply
All companies that have a headcount of 1-4 employees (including founders and owners) must comply.
State-sponsored program
CalSavers
Colorado
Companies with 5-14 employees are mandated to offer an IRA or 401(k) plan.  Enroll by June 20, 2023 to avoid penalties.
Mandate details
Penalties
Eligible employees may be subject to fines of up to $100 annually, with a maximum of $5,000 in fines across all employees per calendar year. Penalty enforcement will commence no earlier than one year after the program starts or one year after an employer is required to participate, whichever is later.
Companies that must comply
Companies with a headcount of 5-14 (including founders and owners)
State-sponsored program
Colorado Secure Savings Program
Connecticut
Companies of all sizes are mandated to offer an IRA or 401(k) plan.  Enroll by August 31, 2023 to avoid penalties.
Mandate details
Penalties
Under HB 6552, which was approved with an 88-61 vote, the state Comptroller’s office has the authority to impose fines ranging from $500 to $1,500 on businesses that do not comply with the MyCTSavings program requirements.
Companies that must comply
Companies of all sizes
State-sponsored program
MyCTSavings
Delaware
There has been passed legislation with company requirements to be determined.
Mandate details
Penalties
Any business that does not comply will be subject to a penalty of $250 per employee annually, with a maximum penalty of $5,000 per year.
Companies that must comply
TBD
State-sponsored program
Delaware Expanding Access for Retirement and Necessary Saving (EARNS)
District of Columbia
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Florida
There are no active or pending mandates requiring companies to offer a retirement plan.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Georgia
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Hawaii
There has been passed legislation with company requirements to be determined.
Mandate details
Penalties
A penalty of $25 will be imposed for each month a covered employee is not enrolled in the program, increasing to $50 for each month they remain unenrolled following the assessment of the initial penalty.
Companies that must comply
TBD
State-sponsored program
Hawaii Saves
Idaho
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Illinois
Companies with 5-15 employees are mandated to offer an IRA or 401(k) plan.  Enroll by November 1, 2023 to avoid penalties.
Mandate details
Penalties
The penalty for the first year of non-compliance is $250 per eligible employee. For each subsequent year, the penalty increases to $500 per eligible employee.
Companies that must comply
All companies that have a headcount of 5-15 employees (including founders and owners) must comply.
State-sponsored program
Illinois Secure Choice
Indiana
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Iowa
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Kansas
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Kentucky
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Louisiana
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Maine
Companies with 5 or more employees are mandated to offer an IRA or 401(k) plan.  Enroll by April 1, 2024 to avoid penalties.
Mandate details
Penalties
Under the current law, the deadline and maximum penalty per covered employee are as follows: before April 1, 2024, the penalty is $10; from April 1, 2024, to March 31, 2025, it is $20; and from April 1, 2025, to September 30, 2026, the penalty increases to $50.
Companies that must comply
Companies with a headcount of 5 or more.
State-sponsored program
MERIT
Maryland
Companies are mandated to offer an IRA or 401(k) plan.
Mandate details
Penalties
No penalties
Companies that must comply
None (All Deadlines Passed)
State-sponsored program
Maryland Small Business Retirement Savings Program
Massachusetts
Companies can voluntarily offer an IRA or 401(k) plan.
Mandate details
Penalties
None
Companies that must comply
For Non-Profits
State-sponsored program
Massachusetts Defined Contribution CORE Plan
Michigan
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Minnesota
Companies are mandated to offer an IRA or 401(k) plan.
Mandate details
Penalties
TBD
Companies that must comply
TBD
State-sponsored program
Minnesota Secure Choice Retirement Program
Mississippi
There are no active or pending mandates requiring companies to offer a retirement plan.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Missouri
Companies can voluntarily offer an IRA or 401(k) plan.
Mandate details
Penalties
No penalties
Companies that must comply
N/A
State-sponsored program
Show-Me MyRetirement Savings Plan
Montana
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Nebraska
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Nevada
All companies are required to offer an IRA or 401(k) plan with deadlines ranging based on company size.
Mandate details
Penalties
No penalties
Companies that must comply
All companies must comply with deadlines ranging based on size.

July 1, 2025: 1000 or more
Jan 1, 2026: 500 - 999
July 1, 2026: 100 - 499
Jan 1, 2027: 99 or less
State-sponsored program
Employee Savings Trust Program
New Hampshire
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
New Jersey
Companies with 25 or more employees are mandated to offer an IRA or 401(k) plan. Employers with 40+ employees must enroll by September 15, 2024, and those with 25-39 employees by November 15, 2024, to avoid penalties.
Mandate details
Penalties
Penalties for each year of non-compliance are as follows: a written warning for the first year; $100 per employee for the second year; $250 per employee for the third and fourth years; and $500 per employee from the fifth year onward.
Companies that must comply
Employers who have been in business at least 2 years and have 25 or more employees.
State-sponsored program
New Jersey Secure Choice Savings
New Mexico
Companies can voluntarily offer an IRA or 401(k) plan.
Mandate details
Penalties
No penalties
Companies that must comply
N/A
State-sponsored program
New Mexico Work and Save
New York
Companies are required to offer an IRA or 401(k) plan.
Mandate details
Penalties
Non-compliance with this legislation could lead to a civil penalty of $250 per eligible employee.
Companies that must comply
TBD
State-sponsored program
New York Secure Choice Savings
North Carolina
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
North Dakota
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Ohio
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Oklahoma
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Oregon
Companies with 1-2 employees are mandated to offer an IRA or 401(k) plan.  Enroll by July 31,2023 to avoid penalties.
Mandate details
Penalties
Employers who do not sponsor a retirement plan or participate in the state-mandated program by the designated deadline may be subject to a penalty of $100 per affected employee. The total maximum fine per year is $5,000.
Companies that must comply
1 - 2 Employees
State-sponsored program
OregonSaves
Pennsylvania
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Rhode Island
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
South Carolina
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
South Dakota
There are no active or pending mandates requiring companies to offer a retirement plan.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Tennessee
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Texas
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Utah
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Vermont
All companies are required to offer an IRA or 401(k) plan with deadlines ranging based on company size.
Mandate details
Penalties
25 or More
Deadline and maximum penalty per covered employee are as follows: $10 before October 1, 2025; $20 from October 1, 2025, to September 30, 2026; and $75 starting on October 1, 2026.

15 to 24
The deadline and maximum penalty per covered employee are structured as follows: $10 before October 1, 2025; $20 from October 1, 2025, to September 30, 2026; and $75 on or after October 1, 2026.

5 to 14
The schedule for the maximum penalty per covered employee is as follows: $10 until October 1, 2025; $20 from October 1, 2025, through September 30, 2026; and $75 beginning October 1, 2026.
Companies that must comply
July 1, 2025: 25 or more
Jan 1, 2026: 15 to 24
July 1, 2026: 5 to 14
State-sponsored program
VTSaves
Virginia
Companies with 25 or more employees are mandated to offer an IRA or 401(k) plan.  Enroll by February 15, 2024 to avoid penalties.
Mandate details
Penalties
Employers who fail to provide retirement options for their employees are subject to an annual penalty of $200 per eligible employee.
Companies that must comply
All companies that have a headcount of 25 or more employees must comply.
State-sponsored program
RetirePath Virginia
Washington
Companies must offer a retirement plan.  There is no deadline
Mandate details
Penalties
No penalties
Companies that must comply
No specifications
State-sponsored program
Washington Small Business Retirement Marketplace
West Virginia
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Wisconsin
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Wyoming
There is pending legislation that may someday require certain companies to offer a retirement plan. This proposed mandate is not yet active.
Regardless, we recommend getting a retirement plan to secure the financial future of you and your employees
Get Started with Ubiquity
Does your state require you to offer a retirement plan?
Click any state on the map to learn about its retirement legislation

Why choose a Ubiquity plan instead of a state-run option

Higher contribution amounts

Our 401(k) solutions 100% comply with every state’s mandate requirements while offering higher contribution amounts than IRAs.

More tax credits available

Save more in personal and business taxes than any state plan while lowering taxable income.

Streamlined payroll integrations

Automated plan administration can save time and prevent stress.

Flat-fee cost structure

Offers transparent low cost fees that won't increase as your retirement balance grows.

More protection

Our plans aren’t tied to any state government, so you have peace of mind with a private provider.

Customizable vesting schedule

Choose when you'd like employer contributions to vest, enabling you further customization in your plan.

Want to talk to a retirement expert? Get a free consultation
Want to talk to a retirement expert? Get a free consultation

Frequently asked questions

How does the SECURE Act provide tax credits for small businesses offering retirement plans?

The Act provides tax credits to small businesses that establish new retirement plans, and for those that utilize automatic enrollment. If establishing a new plan, a business can get a tax credit from $500 to up to $5000 for the first three years. If implementing automatic enrollment, businesses can receive a $500 credit for the first three years also. This is designed to decrease financial burden and encourage more employers to offer retirement benefits to their employees.

What is the impact of the SECURE Act on automatic enrollment in 401(k) plans?

Due to the SECURE Act, the cap on automatic escalation rates has increased from 10% to 15%. This encourages higher savings for employees who are automatically enrolled. Additionally, the Act includes a tax credit for small businesses that establish new 401(k) plans with automatic enrollment, incentivizing and encouraging participation.

How does the SECURE Act address retirement savings for long-term, part-time workers?

The SECURE Act allows more saving opportunities for long-term, part-time workers by requiring employers to allow these employees to participate in their 401(k) plans if they work at least 500 hours per year for three consecutive years (this will be changed to two consecutive years starting in 2025). This applies to all plans, and the start of the 500-hour calculation began on January 1, 2021, with eligibility for long-term, part-time employees starting on January 1, 2024. An important part of this is that employers must track hours but are not required to provide matching or nonelective contributions for these part-time workers.

Does the SECURE Act affect required minimum distributions?

The SECURE Act of 2019 changed the rules for Required Minimum Distributions by increasing the age at which you must begin taking money out of your retirement account. The details are as follows:

- Age Requirement: If you were born on or after July 1, 1949, your first RMD will be the year you turn 72. If you were born before that date, the age remains 70½.

- Calculation Method: RMDs are calculated by dividing your 401(k) balance as of December 31 of the previous year by your life expectancy factor, which is taken from the IRS Uniform Lifetime Table.

Flexibility in Fulfilling RMD Obligations

There are several options when it comes to fulfilling your RMD obligations:

- Multiple 401(k)s: If you have multiple 401(k) accounts, you must calculate the appropriate RMD for each account individually.

- IRAs: For IRAs, you have the option to take the total RMD amount from one account or distribute it among several.

- Withdrawal Options: You can opt for a one-time withdrawal or set up automatic distributions from eligible accounts.*

- Reinvestment: After withdrawing your RMD, you are not required to spend it. You can choose to reinvest the funds in a taxable account.

- Tax Implications: Withdrawn RMDs are taxed as regular income by federal, state, and local governments for that year. Failure to comply can lead to IRS penalties.

Financial Advice: If you are concerned about maximizing your retirement savings or managing an inheritance, consulting a financial adviser is advisable.

Impact of Inheritance Under the SECURE Act

If you have recently inherited a 401(k) plan from a deceased loved one, it's important to be aware of the implications of the SECURE Act:

Prior to the SECURE Act: Non-spousal beneficiaries could only take the Required Minimum Distribution over their life expectancy.

Changes Introduced by the SECURE Act: This tax advantage has been eliminated. Non-spousal beneficiaries are now required to liquidate the inherited 401(k) account within 10 years of the original plan holder’s death, which could significantly increase your taxable income.

*Note: If your plan is with Ubiquity, automatic distributions are currently unavailable.

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