Secure 2.0 heads to Biden. Here’s what it means for retirees

Published Updated 2 Min Read

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As Congress finally pushed through its $1.7 trillion spending bill at the last minute, it also concluded another saga: the months-long quest to pass Secure 2.0.

The sweeping retirement legislation, pieced together from several different Senate and House bills, had been percolating in Congress for the better part of a year. The package is full of popular reforms, supported by the industry and backed by a rare bipartisan consensus — but for months, it never got a vote.

Many U.S. employers offer 401(k)s or other retirement plans, but not all employees take advantage of them. In 2021, only 75% of private industry workers with access to an employee-provided plan actually participated in it, according to the Bureau of Labor Statistics. Automatic enrollment offers a solution: Instead of hoping workers sign up, employers can make plan participation the default, unless employees opt out. 

While the approach is already legal in the U.S., Secure 2.0 goes a step further by making it not only allowed, but required. Starting in 2025, employers that provide newly created 401(k) and 403(b) plans will have to auto-enroll their workers in them, with an initial contribution rate between 3% and 10%. There are many exceptions, including all currently existing plans, as well as plans provided by churches and some small businesses. But experts say the policy sends a powerful message.

Nathan Place
National Reporter

Nathan Place is a national reporter at American Banker. A native of New York City, he has worked for more than a decade in both print and video journalism. He got his start in Beijing, where he … Read full bio


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