SECURE 2.0 Act: What Business Leaders Need to Know 

Federal regulations don’t always show up in the latest headlines, but this one deserves some attention. The SECURE 2.0 Act introduces a wide range of retirement-related updates that will affect businesses across the country, especially those managing payroll, benefits, and reporting. Some provisions are already in effect, while others will phase in over the next several years. Either way, this law is big, and it’s reshaping how employers support retirement savings and stay compliant. 

For leaders, staying informed on these next phases is bottom-line essential. With workforce shortages, seasonal hiring, decentralized teams, and increased pressure on HR, no one has time for preventable payroll or benefits mistakes. Today, we’ll break down the Act in plain terms and outline how Netchex is preparing our platform to support you through every phase of the rollout. 

What Is the SECURE 2.0 Act? 

SECURE 2.0 Act is a sweeping federal law designed to improve retirement security for workers and expand access to employer-sponsored plans. It builds on the original SECURE Act (of 2022) by adding new rules that touch enrollment, eligibility, contributions, emergency access, employer incentives, and reporting. 

Congress had two big goals: 

1. Make it easier for people to participate in retirement plans, and 

2. Reduce barriers that keep small and midsize businesses from offering them. 

That’s why the Act includes automatic enrollment requirements, increased tax credits, expanded catch-up contribution rules, and new ways for employees to access emergency funds without penalties. It’s also why employers will see shifts in reporting, especially around Roth contributions and student loan-related matching. 

For many businesses, these changes introduce new administrative responsibilities. For payroll and HR teams already stretched thin, understanding what’s coming is the first step toward staying ahead of it. 

Who Does the SECURE 2.0 Act Affect? 

The law touches almost everyone involved in the retirement plan ecosystem. This includes employees, employers, and the systems connecting the two. 

Employees See More Access, Earlier Participation, and Greater Flexibility 

Automatic enrollment becomes a default for newly created qualified plans starting in 2025. Eligible employees will need to be automatically enrolled at a minimum contribution rate of 3 percent, with automatic annual increases until the rate reaches at least 10 percent. Businesses employing 10 or fewer staff members are exempt, but all others offering new plans will need a clean eligibility and enrollment tracking process. 

Employees also gain penalty-free access to emergency funds. Once per year, individuals can withdraw up to $1,000 for qualified personal emergencies without the usual early-withdrawal penalty. That opens the door to more flexibility for workers while adding another layer of reporting responsibility for employers and plan administrators. 

Another major shift is student loan matching. Employers now have the option to treat student loan payments like elective deferrals and match them accordingly. This is an important benefit for retention and recruitment, especially as younger workers enter the workforce carrying significant student debt. But it also introduces new tracking, accounting, and documentation requirements. 

Long-term part-time employees also see increased access. Instead of three consecutive years of meeting hours thresholds before becoming eligible for retirement participation, the requirement drops to two. Industries like restaurants, retail, hospitality, fitness, and building services (where part-time work is common) will feel this change directly. 

Finally, catch-up contributions expand beginning in 2025. Workers aged 60 to 63 can contribute higher amounts, and high earners making over $145,000 will eventually be required to treat catch-up contributions as Roth contributions once the delayed implementation period ends after 2026. 

Employers Face New Mandates and Reporting Considerations 

For employers, the Act introduces several operational updates. 

There are new and expanded tax credits for some small businesses that start retirement plans. This is designed to remove cost-related barriers for companies trying to offer better benefits. At the same time, businesses that create new 401(k) or 403(b) plans after January 1, 2025, will be required to automatically enroll employees, adding another compliance factor to new-plan setup. 

Employers may also elect to provide Roth matching contributions, giving employees a new tax structure option for employer-provided benefits. 

And finally, the SECURE 2.0 Act introduces new Form W-2 reporting rules that may affect how businesses classify and report certain Roth contributions and de minimis financial incentives. 

Learn more from the IRS: How businesses complete W-2s

What Business Owners Should Expect 

The practical impact of the SECURE 2.0 Act varies by company size, industry, and workforce structure. But several themes apply across the board. 

1. Eligibility Tracking Will Become More Complex 

Automatic enrollment, automatic escalation, and part-time eligibility all increase the need for reliable tracking. If your team struggles today with disconnected systems, spreadsheet-based processes, or manual deductions, those challenges won’t magically fix themselves under SECURE 2.0 Act. 

2. Payroll Settings Must Reflect New Contribution Rules 

Catch-up contribution changes, Roth requirements for high earners, and plan-related elections will all need to map correctly to payroll. These rules cannot be managed casually. Instead, they must be implemented with precision. 

3. Employee Communication Will Matter More 

Employees will have questions: 

• “Why am I being automatically enrolled?” 

• “How does the emergency withdrawal work?” 

• “Can my student loan payment really count toward matching?” 

Your team will, of course, need clear answers. With lean HR teams already doing more with less, communication tools and automation can make or break your compliance experience. 

4. Year-End and Quarterly Reporting Will Shift 

Because of the new W-2 rules and various Roth-related provisions, accuracy will matter at every step and not just during crunch time. Businesses will need visibility long before year-end arrives. 

How Netchex Is Preparing to Support SECURE 2.0 Act 

We’ve invested in system updates, reporting improvements, and workflow enhancements so clients can transition smoothly as each provision takes effect. 

Platform Enhancements Aligned with Eligibility and Enrollment Rules 

As automatic enrollment and part-time eligibility provisions go live, Netchex will introduce updates that help businesses keep employee status accurate and enrollment ready. This includes adjustments to employee setup fields, tracking logic, and workflows that allow teams to follow the Act’s requirements without manual guesswork. 

Improved Reporting and Contribution Handling 

Because the SECURE 2.0 Act affects Roth contributions, catch-up contribution structure, and certain W-2 elements, Netchex is building more clarity into deduction types, contribution categories, and reporting outputs. Clients will see updates that help eliminate confusion and support accurate recordkeeping throughout the year. 

Cleaner Workflows for Payroll Administration 

As contribution requirements shift, the Netchex system will adapt to deduction processing, logic validations, and contribution-limit support. This means smoother payroll runs and fewer manual corrections, which are key benefits for teams that already operate on tight deadlines. 

Clear Guidance and Real Support from Real People 

Keeping up with compliance is easier when you have a team that truly understands your business. Netchex’s U.S.-based support team is ready to help clients navigate our product updates in light of these changes. This aligns directly with our brand culture: real people who show up and stick with you. 

In-Platform Demo Video 

A detailed walk-through from our Product team is offered below. It shows where to find updated fields, how contribution categories are structured, and what parts of the system are being enhanced in preparation for SECURE 2.0 Act. 

Stay Ready for What’s Ahead 

SECURE 2.0 Act is a multi-year effort that will continue to evolve. Staying ahead of these rules means preparing your systems, training your team, and making sure your payroll and HR workflows are ready for what comes next. 

When you’re ready to walk through what the Act means for your business or explore how our software updates will support your team, reach out to your Account Manager or contact us here. Netchex is here to help you navigate every new requirement that comes next. 

We’re Here to Help 

At Netchex, we understand the importance of keeping pace with an evolving regulatory environment. Our teams continuously monitor federal, state, and local developments to design our platform towards compliant payroll and HR operations.  

It is important to note that while Netchex provides the HR and payroll tools and resources to assist with compliance, each employer is ultimately responsible for assessing how applicable laws and regulations affect their business and for configuring their systems accordingly. Because requirements can vary based on specific circumstances, we encourage you to contact your professional advisors as well as our Service team with any questions about how our platform supports upcoming changes that may impact your organization. They are prepared to offer guidance on how our features can support your needs within the scope of our services.  

We appreciate your continued partnership and will remain committed to supporting you with clarity, responsiveness, and confidence as you navigate these changes. 

Disclaimer:   This content and embedded video are provided for general informational purposes only.  Nothing in this content or this video serves as legal, accounting, tax, or investment advice and should not be relied on as such.  You are responsible for checking information and your specific compliance needs with your professional advisors.