The promise of SECURE 2.0

While many of SECURE 2.0's 90-plus provisions have already gone into effect, it is worth highlighting two that will become official on January 1, 2024, potentially paving the way for more fruitful open enrollment seasons for years to come:

Matching contributions for student loan repayments: Employers will be able to treat qualified student loan payments in the same way they would treat retirement plan contributions for the purposes of offering a match. In other words, employers can make a contribution to an employee's retirement account based on the amount they pay toward their student loan balance. One of the age-old questions in personal financial management is whether one should prioritize paying down debt or saving for the future. In this way, employees don't have to choose. Of note, the current administration has been rolling out student loan relief packages, which can help ease the burden for many. But these programs tend to address certain subsets of borrowers, leaving many–especially those with private loans–still on the hook for significant sums.
Emergency savings accounts: Plan sponsors will be able to offer non-highly compensated employees a savings account linked to their retirement account. Employees would contribute to these accounts on a Roth basis and have the opportunity to make withdrawals as often as monthly. When an employee is living paycheck to paycheck, a medical emergency or unexpected car trouble could be make-or-break. Having this emergency cushion available can prevent them from resorting to credit cards, high-interest loans, or even 401(k) loans in order to stay on track toward their financial goals.

While highly valued by employees, benefits such as emergency savings accounts and student loan repayment are each offered in only about 5-10% of companies today. There is clearly more work to do, but this legislation paves the way for real progress.

Instant Insights /

SECURE 2.0 opens up 2 new savings options for low-income workers in 2024

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