Beyond deductions & credits: The underlying effects of SECURE 2.0 on employers

SECURE 2.0 Act

Saving for retirement has always been an issue for Americans.  According to the 2022 Retirement Confidence Survey, about 19% of American workers have less than a $1,000 in savings and investments.  One often cited reason for this has been the lack of retirement plan options.  Financial professionals and many lawmakers have reasoned that if we simply give employees more opportunities to save, then they naturally will.  Out of this logic SECURE 2.0 was passed.  The media has largely framed it as a positive for employees, because it will allow them to save more for retirement.  A huge win.

On the employee side though, the implications are more complex.  While certainly the increased flexibility in retirement plan design and tax incentives are appealing on the surface, the issues go far beyond credits and deductions and force employers to rethink the role of the retirement plan in their strategy for recruiting and retaining talent.  A closer look at the details raises many questions that will need to be answered by companies in the upcoming years.