The Secure Act 2.0 includes provisions that address the obstacles facing employees who are trying to save for retirement but are weighed down with significant student debt. One of the new rules allows employers to match retirement contributions based on the employee’s qualified student loan payments (QSLPs), allowing the employees to receive the match even if they cannot make the elective retirement contribution. The plans allowed to participate include 401(k)s, 403(b)s, 457(b)s and SIMPLE IRAs.
Another provision in the SECURE Act 2.0, allows longterm, part-time employees (must be at least age 21) with at least 500 hours of service in two consecutive years (instead of three consecutive years in the original SECURE Act) to participate in 401(k) plans beginning after December 31, 2024. The company is not obligated to match the elective deferrals.
The new rules also include ERISA-covered 403(b) plans to allow part-time employees who have reached age 21 and have worked at least 500 hours in two consecutive 12-month periods (tracking hours started on January 1, 2023) to make elective deferrals to the plan. However, employers are not required to provide a match.