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  • Quarterly update Q2 2025
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Q2 2025

SECURE 2.0 quarterly update

  • Implementation updates
  • Optional provisions
  • Regulatory roundup

    Regulatory roundup

    The beginning of 2025 was very active with a slew of new guidance issued. This second quarter, however, has been very quiet. While much of the guidance issued has provided long-awaited clarity on both required and optional provisions, we will continue to monitor for more updates as they become available.

    Guidance on required provisions

    IRS proposed regulation

    Background

    On January 13, 2025, the IRS issued a proposed regulation addressing the SECURE 2.0 provisions that pertain to catch-up contributions. This regulation covers, among others, the required Roth catch-up contribution provision, which requires certain catch-up contributions be made in the form of Roth contributions for individuals who exceed a FICA wage threshold.

    Key takeaways

    • A plan can continue to offer catch-up contributions even if it does not allow Roth contributions. 
    • Plans cannot require that all catch-up contributions be Roth contributions. 
    • FICA wages would be defined by reference to Social Security taxes and are not prorated for an individual’s year of hire.
    • Plans will be permitted to provide that a participant who is subject to the mandatory Roth catch-up requirement is deemed to have irrevocably designated any catch-up contributions as designated Roth contributions. 
    • If a participant is subject to the mandatory Roth catch-up rules and a catch-up contribution is incorrectly contributed as regular (pre-tax) catch-up, the plan can correct the failure by distributing the pre-tax catch-up contribution(s) that should have been Roth.
    • If a dual-qualified Puerto Rico plan permits Roth catch-up contributions for United States employees, the plan will be treated as satisfying the mandatory Roth catch-up contribution requirements if Puerto Rico employees are eligible to make catch-up contributions as traditional after-tax contributions.

    You can read the full IRS proposed regulation here. 

    For the provisions listed below, we are still anticipating guidance. We will update you with more information as it becomes readily available.

    • Required minimum distribution (RMD) final regulations
    • Roth catch-up contribution final regulations
    • Matching contributions for student loans
    • CIT expansion to 403(b) plans
    • Technical corrections bill

    Reminder: Plan amendment deadlines


    (applies regardless of plan year) 

    Now that 2025 is underway, plan sponsors should review their plan documents to assess areas that require updates to ensure compliance now and in the years to come. At the end of 2023, IRS Notice 2024-2 extended the deadline for plan amendments relating to the CARES Act, the SECURE Act, and SECURE 2.0. Therefore, no mandatory amendments are due by the end of 2025. However, plan sponsors should decide if making certain amendments now (for example, changes from the CARES Act of 2020) would make sense for their individual plans when it comes to operations and changes already implemented. While many SECURE 2.0 provisions have already taken effect, plan sponsors may want to consider waiting to amend their plans to accommodate future provisions and further government guidance.

    Vanguard will continue to share the following important deadlines with you throughout 2025 and beyond:

    December 31, 2026
    Qualified DC plans (examples: 401(k) and 403(b) plans)
    December 31, 2028
    Collectively bargained plans
    December 31, 2029
    Governmental 457(b) plans 

    The SECURE 2.0 Plan Sponsor and Consultant Resource Center offers you the latest insights and information from Vanguard.

    SECURE 2.0 Act resources

    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 2025 and beyond. The resources below provide detailed insight on what you can expect from required provisions coming in 2025, as well as what optional provisions may be a best fit for your participants on their path to financial wellness.
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