Changes come with SECURE 2.0

The report also noted that the recently-passed SECURE 2.0 legislation will have an impact on defined contribution plans—with some changes being required and some optional. According to the report, the changes will include:

Qualified student loan payments: Plan sponsors may elect to treat qualified student loan payments as elective deferrals eligible for employer matching contributions. An employee's aggregate qualified student loan payments for the year may not exceed the the maximum annual amount an individual participant may defer under a 401(k), reduced by the employee's elective deferrals for the year.
Pension-linked emergency savings accounts (ESAs): Plan sponsors may add ESAs to their DC plans. Non-highly compensated employees may contribute to these accounts on a Roth basis, and the portion of the account attributable to participant contributions cannot exceed the lesser of $2,500 or such other amount designated by the plan sponsor. The $2,500 will be indexed for inflation.
Roth catch-up contributions: Plans that offer catch-up contributions must require participants whose wages in the prior calendar year exceeded $145,000 (as defined in IRC section 3121[a]) to make catch-up contributions on a Roth basis. The $145,000 will be indexed for inflation.

HSA limits also get a boost

According to 401K Specialist, contribution limits for Health Savings Accounts (HSAs) will also increase in 2024. Using IRS data, Brian Anderson wrote for the website: "The annual contribution limit in 2024 for HSAs will jump to $4,150 for self-only coverage (up from $3,850 in 2023) and $8,300 for family coverage (up from $7,750 in 2023). The inflation-adjusted amounts mark the largest-ever increase to the amount of money that can contributed to the triple-tax advantaged accounts each year."

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401(k) contribution limit projections for 2024: What plan sponsors may expect from the IRS

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