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Two More Key Provisions of the SECURE 2.0 Act

In our blog on January 23, 2023, we covered two key provisions of the SECURE 2.0 Act: automatic enrollment of employees and the delay of RMDs. This week, we will cover two additional key provisions: additional catch-up contributions and student loan matching payments.

Additional Catch-Up Contributions

Catch-up contributions allow taxpayers nearing retirement to make additional contributions to their retirement accounts. This provision intends to help taxpayers make up for prior years when taxpayers couldn’t contribute as much to their retirement accounts and are currently in a financial position to supplement their retirement accounts. 

Prior to the enactment of SECURE 2.0 Act, taxpayers over 50 years old could make catch-up contributions of up to $7,500 to their retirement plans. SECURE 2.0 Act, §109 introduces a new group of taxpayer classification for contributions: individuals approaching retirement. This provision gives them the ability to save extra money during what is likely their peak earning years. Most taxpayers in this age range have lower expenses, and higher incomes. The following are specifics taxpayers should know.

  • Contributions are increased to the greater of either $10,000 or 50% of the regular catch-up amount.
  • Contributions depend on inflation (indexed after 2025) but will at least be $10,000.
  • Only taxpayers between the age of 60 and 63 can leverage the additional catch-up contributions.
  • Additional catch-up contributions do not go into effect until January 1, 2025.

Let’s look at the example of two siblings that are born one year apart. Fred was born in 1961, and Melinda was born in 1962. They both work full-time and want to max out their employer retirement contributions. In 2025, Fred turns 64 and Melinda turns 63. Fred isn’t eligible for the additional $10,000 catch-up contribution due to his age (being older than 63). Fred is limited to the §401(k) limit plus the additional catch-up contribution for taxpayers over 50, which is adjusted for inflation. Melinda, however, is eligible to contribute to the §401(k) limit plus up to $10,000 extra under §109.

Student Loan Matching Contributions

Many taxpayers might be unable to save for retirement because they have extensive student loan debt. In instances where employees make qualified contributions toward student loans, employers can pay a matching contribution to the employee’s retirement account.

Employers may rely on the employee’s verbal payment confirmation for qualifying student loans. However, documentation should substantiate the match for qualification testing purposes.

Employers that offer a §401(k), §403(b), §457(b), or SIMPLE IRAs can modify their plan terms to include student loan payments as qualifying contributions. This avenue can help employees burdened with student loan debt, but it correspondingly burdens employers with required matches. Employers will need to follow the same matching provisions for qualifying student loan payments, increasing the employer’s portion of the match.  

Employers that adopt the student loan matching contributions provisions of the SECURE 2.0 Act, §110 must treat qualified student loan repayments the same way as participant deferrals. The match, submittal, and vesting schedules will remain the same as regular plan participants. Some employers may choose to remit annual contributions instead of with each payroll cycle for administrative purposes.

This provision is effective beginning on January 1, 2024, providing employers an extra year to work out the fine details of the program for implementation.

If you are interested in these provisions and more information on the SECURE 2.0 Act, the Tax School is hosting a webinar on June 6, 2023, Overview of SECURE 2.0 Act.


Kelly Golish, CPA
University of Illinois Tax School

Rachel Szeklinski, CPA


SECURE 2.0 Act of 2022, §§108-110.

IRC §127

Disclaimer: The information referenced in Tax School’s blog is accurate at the date of publication. You may contact if you have more up-to-date, supported information and we will create an addendum.

University of Illinois Tax School is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. This blog and the information contained herein does not constitute tax client advice.

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