Retirement planning in 2025
Key SECURE 2.0 changes and Minnesota’s new retirement program
By Ron Ulrich
June 27, 2025
As public accountants expand into advisory roles, recent legislative developments provide an opportunity to engage clients in retirement planning conversations for both their personal finances and businesses. The SECURE 2.0 Act, enacted in December 2022, includes provisions that will continue to phase in through 2025, 2026 and beyond. The post-tax season window provides an ideal time to assess how these changes could benefit your clients.
Additionally, Minnesota’s state-mandated retirement plan — the Minnesota Secure Choice Retirement Program — is set to launch on Jan. 1, 2026. Key details of this program, and its implications for employers, are outlined below.
KEY SECURE 2.0 Changes
New automatic enrollment rules under SECURE 2.0
The SECURE 2.0 Act requires that most new 401(k) and 403(b) plans automatically enroll employees at a minimum contribution rate of 3% of their pay, with annual increases of 1% until reaching at least 10%. This rule applies to plan years beginning on or after Jan. 1, 2025. Eligible employees must be enrolled by default unless they opt out. While
technical guidance from the IRS is still evolving, employers should take steps now to ensure new plans comply.
Key exceptions to the automatic enrollment requirement include employers with 10 or fewer employees, businesses operating for less than three years and certain plan types, such as church, governmental and SIMPLE plans.
Student loan matching contributions
Employees facing difficulties repaying student loans often find it hard to contribute to a retirement plan. If their employer offers a matching contribution, they miss out on that opportunity as well. Under the
new SECURE 2.0 provisions, employers can count student loan payments as contributions to retirement plans in order to provide a matching contribution, even if the employee isn't directly contributing. This benefit extends to borrowers and co-signers paying loans for themselves or dependents, as long as they certify their loan payments annually.
Retirement plan access for long-term part-time employees
Starting in 2025, employees who work at least 500 hours per year for two consecutive years must be allowed to participate in their employer’s retirement plan. This marks a reduction from the previous three-year requirement.
Final guidance for 401(k) plans is still pending, though proposed regulations were released in November 2023. Notably, the IRS has indicated that any final rule will apply no earlier than plan years beginning Jan. 1, 2026. The IRS issued limited
guidance in October 2024 regarding long-term part-time employees in 403(b) plans that provides helpful information, especially relating to certain employee exclusions in 403(b) plans.
Expanded catch-up contributions for Ages 60-63
Beginning in 2025, individuals aged 60 to 63 will be eligible to make enhanced catch-up contributions to their retirement plans. They can contribute the greater of $10,000 or 150% of the standard catch-up limit — $11,250 for 2025 (with inflation adjustments thereafter). This surpasses the standard $7,500 catch-up limit available to those aged 50 and older and offers a valuable opportunity for higher earners nearing retirement to boost their savings. To learn more, see the IRS guidance, ,
401(k) Limit Increases and Catch-Up Contributions for 2025. This enhanced limit is available in the calendar year an employee turns aged 60 and reverts back to the standard limit in the calendar year in which they turn 64.
Roth catch-up contributions for high earners (2026)
Employees who earn more than $145,000 from the same employer in the prior year will need to use a Roth (after-tax) IRA account for catch-up contributions beginning in 2026. This requirement was initially scheduled to begin in 2024. In January 2025, the Department of the Treasury and the IRS released
proposed regulations offering some guidance to plan administrators on how to implement and comply with the new Roth catch-up rule. Employers will have the option to automatically switch employees' contributions from pretax to Roth when necessary without needing a new election for the participant.
Stay tuned — additional guidance on SECURE 2.0 will continue as the U.S. Treasury and Labor departments finalize and propose new regulations to complete implementation over the next several years.
The Minnesota Secure Choice Retirement Program (2026)
Passed in May 2023, the
Minnesota Secure Choice Retirement Program (SCRP) aims to make it easier for workers to save for retirement if an employer-sponsored plan is unavailable. The program will go into effect on or after Jan. 1, 2026. Here are the key elements:
- Participation. Employers with five or more employees who do not offer a retirement plan are required to participate. Participation is mandatory, and employers may not opt out.
- Contributions. Only employee wage deductions will fund the retirement accounts. Employers are not allowed to contribute to the program.
- Costs and responsibilities. Employers must handle payroll deductions and remit contributions to SCRP’s recordkeeper. They are also responsible for distributing program-provided information to employees. While employers will cover any costs related to payroll processing, the recordkeeper will offer tools compatible with existing payroll systems.
- Employee contributions and options. The SCRP board of directors will set an initial default contribution rate, but employees may adjust the amount or opt out of the program entirely.
- IRA account types. Unless otherwise specified, employee contributions will be deposited into a Roth IRA, but employees may choose instead to contribute to a traditional IRA.
- Withdrawals and tax considerations. SCRP will manage withdrawals and provide tax-related information.
Leveraging SECURE 2.0: A strategic opportunity for tax professionals to strengthen client relationships
The recent federal and Minnesota secure retirement legislative changes present a significant opportunity for tax professionals and financial advisors to expand client conversations beyond compliance. By helping small businesses and individuals navigate
SECURE 2.0, advisors can position themselves as trusted, strategic partners. Proactively addressing these updates strengthens client relationships and adds year-round value, fostering loyalty and business growth.
Ron Ulrich is responsible for delivering products and services to plan sponsors to help them maintain their retirement plans in compliance with all applicable IRS and DOL regulations. Ron has over 30 years of experience in the recordkeeping and administration of retirement plans and holds the ASPPA Certified Pension Consultant (CPC), Qualified Pension Administrator (QPA), and Qualified 401(k) Administrator (QKA) designations.
