Updating 401(k) Plan Documents for SECURE Act & SECURE 2.0 Changes

Managing a 401(k) plan comes with ongoing responsibilities, and one of the most critical tasks for plan sponsors is keeping plan documents up to date. The SECURE Act of 2019 and SECURE 2.0 Act of 2022 introduced sweeping changes that impact retirement plan design, eligibility, and compliance. Employers must ensure that their 401(k) plan documents accurately reflect these new regulations—or risk costly penalties.

In this guide, Talk Retirement explains why updating your plan documents is essential, what the SECURE and SECURE 2.0 Acts require, and the steps you need to take to stay compliant.

Why Updating 401(k) Plan Documents Is Crucial

A 401(k) plan document is the legal foundation of your retirement plan. It defines the rules for eligibility, contributions, distributions, loans, and compliance procedures. When new legislation like the SECURE and SECURE 2.0 Acts introduces changes, your plan document must be updated to reflect them.

Failing to update your documents can result in:

Non-compliance with ERISA and IRS rules
Potential disqualification of the plan
Fines and penalties from the IRS or Department of Labor
Increased audit risk

Talk Retirement emphasizes that proactive updates not only ensure legal compliance but also demonstrate your commitment to protecting participants’ retirement savings.

Key SECURE 2.0 401(k) Updates

The SECURE Act and SECURE 2.0 were designed to expand retirement access, improve savings outcomes, and simplify plan administration. Below are the most significant 401(k) updates you need to incorporate into your plan documents.

1. Automatic Enrollment & Automatic Escalation

Under SECURE 2.0, most new 401(k) and 403(b) plans established after December 31, 2024 must include:

Automatic enrollment starting between 3–10% of pay
Annual automatic escalation of at least 1% until reaching 10–15%

Your plan document must clearly define these features and outline opt-out procedures for employees.

2. Changes to Required Minimum Distributions (RMDs)

The RMD age has increased:

SECURE Act: From 70½ to 72
SECURE 2.0: From 72 to 73 (and eventually 75 in 2033)

Updating your plan document ensures participants follow the correct distribution rules, avoiding unnecessary penalties.

3. Long-Term, Part-Time Employee Eligibility

Previously, part-time employees were often excluded from 401(k) participation. SECURE 2.0 expands eligibility:

Employees working at least 500 hours in 2 consecutive years (3 years under SECURE Act) must be allowed to contribute.

Talk Retirement advises plan sponsors to adjust eligibility definitions and payroll tracking procedures to meet these rules.

4. Catch-Up Contribution Changes

Beginning January 1, 2025:

Employees aged 60–63 can make higher catch-up contributions (up to $10,000 annually or 150% of the standard catch-up limit).
High-income earners ($145,000+) must make catch-up contributions on a Roth basis.

If your plan permits catch-up contributions, your 401(k) plan document must specify these updated rules.

5. Emergency Savings and Withdrawals

SECURE 2.0 introduces new withdrawal and savings features:

Emergency withdrawals of up to $1,000 per year without the 10% penalty
Emergency savings accounts linked to retirement plans for non-highly compensated employees

Including these options in your plan documents ensures participants can take advantage of new savings flexibility.

6. Matching Contributions on Student Loan Payments

Starting in 2024, employers can treat student loan payments as if they were elective deferrals and make matching contributions. If you choose to offer this benefit, your plan document must detail:

Eligibility
Matching formula
Documentation requirements

Talk Retirement can guide employers in adopting this feature to attract and retain younger talent.

Steps to Update Your 401(k) Plan Documents

Review Legislative Requirements
Start with a comprehensive review of the SECURE Act and SECURE 2.0 401(k) updates that apply to your plan.
Coordinate with Your 3(16) and 3(21) Fiduciaries
Fiduciaries like Talk Retirement ensure operational and document compliance, mitigating the risk of errors.
Amend the Plan Document
Draft or adopt an updated plan document or adoption agreement incorporating all required provisions.
Update the Summary Plan Description (SPD)
Provide participants with an updated SPD or Summary of Material Modifications (SMM) to reflect changes.
Implement Operational Changes
Updating documents alone isn’t enough—ensure payroll, HR, and record keeping processes align with the new rules.
Communicate with Participants
Clear, timely communication builds trust and ensures employees understand how the new rules affect their retirement savings.

Deadline for SECURE 2.0 Plan Amendments

The IRS has provided extended deadlines for formally adopting plan amendments:

For most plans: December 31, 2025
Governmental plans: December 31, 2027

Even with this extended timeline, Talk Retirement recommends adopting operational changes immediately to avoid compliance risks.

How Talk Retirement Helps

Keeping up with SECURE 2.0 401(k) updates can be complex, but you don’t have to navigate it alone. Talk Retirement offers:

3(16) fiduciary administration to handle compliance tasks
Proactive plan document updates and amendment tracking
Participant communication support to ensure smooth implementation

By partnering with Talk Retirement, you reduce your risk exposure, avoid costly mistakes, and protect your employees’ retirement future.

Final Thoughts

The SECURE Act and SECURE 2.0 represent the most significant retirement plan legislation in decades. Employers must act now to review, update, and implement changes in their 401(k) plan documents to remain compliant.

With the guidance of Talk Retirement, plan sponsors can confidently meet these requirements, enhance plan value, and focus on what matters most—helping employees achieve a secure retirement.