07/06/23
When the Consolidated Appropriations Act of 2023 was signed into law late last year, it included a number of provisions affecting retirement savings plans. These provisions, collectively referred to as SECURE 2.0, offer many new benefits to employers and employees that are designed to make it more attractive for employers to offer retirement plans and to improve retirement outcomes for employees. The focus of this update is on provisions affecting long-term part-time employees’ eligibility to participate in 401(k) and 403(b) plans. Under SECURE 1.0, long-term part-time employees could participate in 401(k) retirement plans if they completed 1,000 hours of service within one year or 500 hours in each of three consecutive years for the 2024 plan year. SECURE 2.0 changes the eligibility requirements to be considered a long-term, part-time employee from three consecutive years to two consecutive years for employees hired in 2023 or later. SECURE 2.0 applies to 401(k) and 403(b) plans.