SECURE 2.0: How to reduce the burden for defined contribution plan sponsors

As defined contribution (DC) plans are the primary employer-sponsored savings vehicle for most Americans, it’s reasonable to expect legislators and regulators to keep a continued focus on these plans. Each time new rules are introduced, plan sponsors must take time to understand the provisions, evaluate opportunities, and work with advisors and service providers to create an implementation roadmap. This process is time-intensive, can be costly, includes fiduciary decisions, and distracts employers from other talent and business priorities.

The SECURE (Setting Every Community Up for Retirement Enhancement) 2.0 Act of 2022 was enacted as part of the Consolidated Appropriations Act, 2023 on December 29, 2022. SECURE 2.0 combines three related, but separate, bipartisan retirement security bills and includes more than 90 provisions, some of which took effect immediately.

Encouraging workers to participate in retirement plans and encouraging participants to save more, are central goals of SECURE 2.0. Many provisions are intended to expand DC plan participation and increase contributions, while a number of them also provide incentives to employers to participate in MEPs or PEPs. Our article SECURE 2.0 signed into law as part of 2023 federal spending package provides an overview of some of the key provisions in SECURE 2.0.

How can plan sponsors break the cycle of constantly switching gears to tackle complex regulatory and legislative change?

When it comes to regulatory and legislative change, the LifeSight PEP offers employers:

• A voice. We advocate for policy that improves outcomes for our clients and their people.
• Expert analysis. We unpack new guidance and legislation with technical precision to identify decision points and required actions.
• Impact assessment. We deliver a LifeSight point of view informed by WTW’s best ideas and expertise in plan design, investment structure, administration, and compliance.
• Flexibility. We provide flexibility in areas that drive cost or changes to HR and payroll systems.
• A holistic solution. We look for opportunities to connect financial resilience with LifeSight to improve outcomes for employees with differing financial priorities.
• Hands-off execution. We identify the plan features to be adopted by LifeSight and oversee the implementation including plan document amendments, recordkeeping system updates, and participant communications.

Want to learn more?

We provide a range of defined contribution plan solutions to support your retirement strategy. Please contact us to learn more about the LifeSight PEP and how we can help you meet your retirement strategy needs.

1. Source: WTW 2020 U.S. Defined Contribution Plan Sponsor Survey