Top 5 SECURE 2.0 provisions plan sponsors are most likely to adopt: Fidelity

5. Withdrawals for emergency expenses

Plans may allow participants to withdraw up to $1,000 in a year from their retirement account to pay for emergency expenses. Fidelity found that 41% of plan sponsors overall are likely to adopt this provision. Regarding those that have considered the provision, 65% indicated they are likely to adopt, which Fidelity suggests demonstrates that financial wellness solutions remain a top priority for employers as part of their attraction and retention efforts.

1. Increased catch-up contribution limit

SECURE 2.0 increased the catch-up contribution limit for active participants in 401(k) plans who turn 60, 61, 62 or 63 in a calendar year to $10,000 or 50% more than regular catch-up contribution limit, effective Jan. 1, 2025. Fidelity found that 58% of respondents overall are likely to adopt this provision. But when looking at the provision from the perspective of those plan sponsors that have considered the option, the percentage jumps to 88% that are likely to adopt when it becomes available for plan years starting in 2025.(Photo: Birdland/Adobe Stock)

2. Hardship distribution (self-certification)

Employers are no longer required to collect documentation when approving 401(k) hardship distributions, which should help streamline the hardship distribution process, however, employees must self-certify that the hardship distribution is being made because of an immediate financial need. Fidelity found that 56% of respondents overall are likely to adopt this provision. Of the plan sponsors that have considered the provision, 80% indicated they are likely to adopt this provision to streamline plan administration and enhance the participant experience.

3. Disaster-relief withdrawal

Under SECURE 2.0, Congress has provided for ongoing disaster relief for distributions and loans in the case of federally declared major disasters. Slightly less than half (49%) of respondents overall indicated they are likely to adopt this provision. When looking at those plan sponsors that have considered the provision, 80% indicated they are likely to adopt, because access to the funds may be necessary for participants to move forward when federal disasters impact their homes and jobs.

4. Assistance for domestic abuse survivors

SECURE 2.0 allows plan sponsors of 401(k) plans to amend their plans to allow participants who are victims of domestic abuse. Overall, 42% of plan sponsor respondents indicated they are likely to adopt this provision, according to the survey. However, for those that have considered the option, the percentage jumps to 76% that are likely to adopt in order to "best align with organizational policies designed to remove barriers for individuals who are at risk," the findings show.

5. Withdrawals for emergency expenses

Plans may allow participants to withdraw up to $1,000 in a year from their retirement account to pay for emergency expenses. Fidelity found that 41% of plan sponsors overall are likely to adopt this provision. Regarding those that have considered the provision, 65% indicated they are likely to adopt, which Fidelity suggests demonstrates that financial wellness solutions remain a top priority for employers as part of their attraction and retention efforts.

1. Increased catch-up contribution limit

SECURE 2.0 increased the catch-up contribution limit for active participants in 401(k) plans who turn 60, 61, 62 or 63 in a calendar year to $10,000 or 50% more than regular catch-up contribution limit, effective Jan. 1, 2025. Fidelity found that 58% of respondents overall are likely to adopt this provision. But when looking at the provision from the perspective of those plan sponsors that have considered the option, the percentage jumps to 88% that are likely to adopt when it becomes available for plan years starting in 2025.(Photo: Birdland/Adobe Stock)

2. Hardship distribution (self-certification)

Employers are no longer required to collect documentation when approving 401(k) hardship distributions, which should help streamline the hardship distribution process, however, employees must self-certify that the hardship distribution is being made because of an immediate financial need. Fidelity found that 56% of respondents overall are likely to adopt this provision. Of the plan sponsors that have considered the provision, 80% indicated they are likely to adopt this provision to streamline plan administration and enhance the participant experience.

3. Disaster-relief withdrawal

Under SECURE 2.0, Congress has provided for ongoing disaster relief for distributions and loans in the case of federally declared major disasters. Slightly less than half (49%) of respondents overall indicated they are likely to adopt this provision. When looking at those plan sponsors that have considered the provision, 80% indicated they are likely to adopt, because access to the funds may be necessary for participants to move forward when federal disasters impact their homes and jobs.

4. Assistance for domestic abuse survivors

SECURE 2.0 allows plan sponsors of 401(k) plans to amend their plans to allow participants who are victims of domestic abuse. Overall, 42% of plan sponsor respondents indicated they are likely to adopt this provision, according to the survey. However, for those that have considered the option, the percentage jumps to 76% that are likely to adopt in order to "best align with organizational policies designed to remove barriers for individuals who are at risk," the findings show.

5. Withdrawals for emergency expenses

Plans may allow participants to withdraw up to $1,000 in a year from their retirement account to pay for emergency expenses. Fidelity found that 41% of plan sponsors overall are likely to adopt this provision. Regarding those that have considered the provision, 65% indicated they are likely to adopt, which Fidelity suggests demonstrates that financial wellness solutions remain a top priority for employers as part of their attraction and retention efforts.

Instant Insights /

Top 5 SECURE 2.0 provisions plan sponsors are most likely to adopt: Fidelity

5. Withdrawals for emergency expenses

1. Increased catch-up contribution limit

2. Hardship distribution (self-certification)

3. Disaster-relief withdrawal

4. Assistance for domestic abuse survivors

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5. Withdrawals for emergency expenses

1. Increased catch-up contribution limit

2. Hardship distribution (self-certification)

3. Disaster-relief withdrawal

4. Assistance for domestic abuse survivors

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5. Withdrawals for emergency expenses

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Instant Insights /

Top 5 SECURE 2.0 provisions plan sponsors are most likely to adopt: Fidelity

1. Increased catch-up contribution limit

Related: SECURE 2.0 is all good with plan sponsors, but many still need guidance

Lynn Cavanaugh

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