SECURE 2.0 – summary of needed follow on guidance

Here we provide a very brief summary of “technical” SECURE 2.0 retirement policy issues requiring clarification.

Here we provide a very brief summary of “technical” SECURE 2.0 retirement policy issues requiring clarification.


  • Group of plans audit issue/exemption for small plans – The 2023 5500 (published February 24, 2023) fixes this problem (for 2023).

  • Clarification of how recovery of overpayments provision works (e.g., clarification of treatment of current practice with respect to late notices of death, treatment of pre-Act overpayments).


  • Increase in RMD age from 72 to 73 (effective 2023) – 2023 transition issues (treatment of incorrect notices, incorrectly classified payments) – generally addressed/fixed in Notice 2023-23 (generally requires correction of incorrect notification/report by April 28, 2023).

  • Roth employer matching or nonelective contributions (effective for contributions made after December 29, 2022) – guidance needed on taxation, withholding, reporting. E.g., wage and FICA treatment, W-2 vs. 1099R, contributions in 2023 for 2022.

  • Expanding automatic enrollment – 401(k) plans “established” on or after December 29, 2022, must include automatic enrollment and automatic escalation provisions, beginning in the 2025 plan year. Clarification of what “established” means and treatment of transactions, e.g., plan mergers/spinoffs.

  • Catch-up contributions required to be Roth for participants whose prior-year wages exceeded $145,000 (effective 2024) – technical amendment needed to correct apparent elimination of all catch-up contributions. Regulatory relief needed until legislative technical correction can be made.

  • Enhancement of start-up credit – guidance on how the timing/duration of the credit works.

  • QLAC (qualified longevity annuity contract) reforms (elimination of the 25% cap, increase dollar cap to $200,000) – clarify treatment of amendment to existing contracts.

  • Cash balance plan projections – allow anti-cutback relief for elimination of minimum crediting rates included in plan to satisfy prior rule.

  • Recovery of retirement plan overpayments – clarification of tax/rollover treatment of pre-Act overpayments, no need to recoup overpayments of benefits in excess of Tax Code limits.

  • Self-correction of inadvertent plan failures – clarify changes apply to pre-Act failures.

  • Eliminating the incentive not to partially annuitize – clarify annuity valuation.

  • Exception to the 10% early withdrawal tax for terminally ill – clarification that administrator can rely on any reasonable evidence.

Generally: reasonable good faith compliance standard until guidance is issued.

We also note one major SECURE 2.0 policy issue outstanding: While SECURE 2.0 eliminated Tax Code obstacles to the investment of 403(b) plans in collective trusts, federal securities law obstacles still remain and will require a further, legislative fix.

This is a publication of O3 Plan Advisory Services. If you have any comments, or have questions about regulatory developments, please contact your relationship manager or Mike Barry at    The information, analyses and opinions set out herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity. Nothing herein constitutes or should be construed as a legal opinion or advice. You should consult your own attorney, accountant, financial or tax advisor or other planner or consultant with regard to your own situation or that of any entity which you represent or advise.   Information set out or referred to above has been obtained from sources believed to be reliable. However, neither O3 Plan Advisory Services nor any of its affiliates has verified the accuracy or completeness of any such information. All information is provided “as is” and O3 Plan Advisory Services and its affiliates expressly disclaim all express and implied warranties regarding the information. Neither O3 Plan Advisory Services nor any of its affiliates shall have any liability for any use of the information set out or referred to herein.