April 2026
SECURE 2.0 plan sponsor update
Optimizing your plan with optional provisions
The optional provisions of SECURE 2.0 present the opportunity for plan sponsors to offer additional pathways to financial well-being and timely assistance to employees through their retirement plans. If you’re interested in adopting one or more of these provisions in 2026, reach out to your Vanguard representative.
Vanguard offers the following optional provisions:
- Higher catch-up contribution limit
- Matching contributions for student loans
- Emergency expense withdrawals (EEW)
- Self-certification for hardship withdrawals
- Withdrawals for domestic abuse (WDA)
- Qualified Disaster Recovery Distribution (QDRD)
- Automatic cash-out limit increase for non-qualified joint and survivor annuity (non-QJSA) plans
- Expanded hardship withdrawal rules for 403(b) plans
- Elimination of the “first day of the month” requirement for governmental 457(b) plans
Note: If a plan sponsor adopted any of these provisions, a plan amendment is required.
Financial wellness
The following optional provisions are dedicated to helping participants save—and save more—for retirement. Whether they started late on their retirement savings journey or feel unable to make contributions due to student loan debt, these provisions provide additional flexibility and represent an opportunity to encourage participants to increase contributions to their plan before retirement.
This provision allows plan sponsors to increase the catch-up contribution limit for participants ages 60 to 63 to $11,250. To learn more, read our Higher Catch-up Contribution Limit brochure.
This provision allows plan sponsors to make matching contributions on qualified student loan payments without requiring employees to make elective deferrals. For purposes of calculating the employer match, those qualified student loan payments are treated just like plan deferrals and are matched based on the plan’s traditional match formula. To learn more, read our Matching Contributions for Student Loans brochure.
Distributions
Vanguard is pleased to offer the following optional distribution provisions, putting participants first and giving them greater flexibility to access funds while also modernizing defined contribution plan rules to meet the needs of today’s workforce.
This optional provision gives employees the ability to take an emergency distribution of up to $1,000 for personal or family emergency expenses without being subject to the 10% early withdrawal penalty. Limitations on the frequency of emergency expense withdrawals apply and are based on repayment of the withdrawal. To learn more, read our Emergency Expense Withdrawal brochure.
This optional provision modifies previous hardship rules to allow plans to permit participants to self-certify that a distribution meets the requirements for a hardship withdrawal and no longer requires participants to provide documentation supporting the need or amount of a hardship withdrawal. To learn more, read our Self-Certification for Hardship Withdrawals brochure.
Under this optional provision, plan sponsors may elect to allow a withdrawal for domestic abuse survivors of either $10,500 or 50% of the participant’s vested account balance (whichever is less) without being subject to the 10% early withdrawal penalty. The survivor also has the option to repay the distribution within three years. To learn more, read our Withdrawals for Domestic Abuse (WDA) brochure.
QDRD is a type of distribution that allows a distribution of up to $22,000 (per disaster) for participants impacted by a federally declared disaster occurring on or after January 26, 2021. To learn more, read our Qualified Disaster Recovery Distributions brochure.
Additional optional provisions available
In addition to the provisions listed above, plan sponsors may want to take advantage of the following optional provisions designed to ease plan administration.
This optional provision raises the statutory limit at which plan sponsors can automatically distribute former employees’ vested account balances without additional participant consent. This increase to $7,000 can help plan sponsors ease the administrative effort associated with small-balance accounts and unclaimed participant assets. To learn more, read our Automatic Cash-out Limit Increase brochure.
The Bipartisan Budget Act of 2018 expanded the hardship rules for 401(k) plans to include more contribution sources and changed the requirement that a loan be taken out prior to a hardship withdrawal. This optional provision of SECURE 2.0 removes inconsistencies between hardship rules for 401(k) and 403(b) plans by allowing 403(b) plan participants to receive hardship distributions from salary reduction contributions; qualified nonelective contributions (QNECs); qualified matching contributions (QMACs); and account earnings on any salary reduction contributions, QNECs, and QMACs. To learn more, read A Guide to SECURE 2.0.
Under this optional provision, participants can elect to defer compensation in a current month if the deferral agreement is entered into before compensation is made available. It does not modify the deferral timing for 457(b) plans of nongovernment tax-exempt entities. To learn more, read A Guide to SECURE 2.0.
Vanguard thought leadership
Vanguard’s early data show that plan sponsors are quickly warming to options like expanded catch-up contributions while taking a more cautious approach to others. Together, these findings offer a snapshot of how employers are putting SECURE 2.0’s flexibility to work.
Participants’ financial well-being is our top priority, and we know that they’re struggling with emergency savings, so we’re offering a way for participants to save with confidence—the Vanguard Cash Plus Account.*
This Vanguard research brief examines how and why participants use hardship withdrawals, highlighting trends in financial stress and the most common reasons workers tap retirement savings for immediate needs. The findings are particularly relevant under SECURE 2.0, which expanded access to hardship withdrawals by allowing participant self‑certification for safe‑harbor reasons, reducing administrative friction and shifting greater responsibility to individuals.
Plan amendment deadlines
(apply regardless of plan year)
Under IRS Notice 2024-2, most qualified retirement plans and nongovernmental 403(b) plans must adopt required amendments for the SECURE Act, CARES Act, and SECURE 2.0 no later than December 31, 2026. Some plans, such as collectively bargained and governmental 457(b) plans, have extended amendment deadlines.
December 31, 2026
Qualified plans that are not a governmental or collectively bargained plan and 403(b) plans not maintained by a public school
December 31, 2028
Collectively bargained plans (i.e., union plans)
December 31, 2029
Governmental plans and 403(b) plans sponsored by a public school
The SECURE 2.0 Plan Sponsor and Consultant Resource Center offers you the latest insights and information from Vanguard.
News and thought leadership
As we acclimate to an environment where many of SECURE 2.0's new rules move from theory to practice, Vanguard remains dedicated to sharing our perspective on the required and optional provisions set to take effect in 2026 and beyond. The resources below provide detailed insight on what you can expect from required provisions coming later this year, as well as what optional provisions may be a best fit for your participants on their path to financial wellness.
All investing is subject to risk, including the possible loss of the money you invest.
* The Vanguard Cash Plus Account is a brokerage account offered by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation, member FINRA and SIPC. Under the Sweep Program, Eligible Balances swept to Program Banks are not securities: They are not covered by SIPC but are eligible for FDIC insurance, subject to applicable limits. Money market funds held in the account are not guaranteed or insured by the FDIC but are securities eligible for SIPC coverage. See the Vanguard Bank Sweep Products Terms of Use and Program Bank list for more information.