Help your clients stay ahead of SECURE 2.0 Act provisions

In December, we shared that we’d continue to keep you informed on SECURE 2.0 Act provisions as we learned more, as well as provide a preview of what’s coming later in the year.

Here’s an update on some key provisions already in place:

• Plan fiduciaries may decide about recovery of mistaken overpayments based on new limitations and protections intended to safeguard overpayments made to recipients for both defined contribution (DC) and defined benefit (DB) plans. We’re putting together a policy statement on our procedures including how we’ll support your clients in handling most overpayment scenarios moving forward. We’ll share more details with you and your clients in late April/early May.
• The Department of Labor (DOL) was directed to establish the Retirement Savings Lost and Found (RSLF) database for DC and DB plans. The database is up and running and participation remains voluntary. Principal®, along with others in the industry, continues to have concerns with participating in this data collection too soon, mainly due to the sharing of personal information without any known parameters on public visibility. When we receive additional guidance, we’ll update our processes and procedures to account for any changes. If your clients would like to participate voluntarily now, we can help.
• Current legislation allows participants to elect to receive employer matching and nonelective contributions as Roth contributions. We’re currently monitoring interest and reviewing service solutions, with the goal of accommodating this provision in 2026. In the meantime, if your clients are interested in this provision, we have options we can discuss.
• The Roth catch-up provision that provided a two-year transition period will be required as of Jan. 1, 2026. Your clients will need to implement processes to accommodate Roth catch-up contributions for participants with FICA compensation of $145,000 or more for the prior calendar year. Ensure your clients are talking with their payroll provider so this provision is implemented in time.

Here's a preview of provisions effective Jan.1, 2026

• Qualified Long Term Care Distributions is a new optional withdrawal with no early withdrawal penalty tax for participants to pay for certified long-term care insurance premiums each calendar year. Withdrawal amounts are limited to the lesser of the premium, 10% of vested benefit or $2500 (indexed). Participants must provide plan sponsors with premium statement(s) to proceed.
• Effective Jan. 1, 2026, participants with DC plans must receive a paper statement annually and those with DB plans must receive one every three years. Participants who affirmatively consented to electronic delivery are exempt, as are employees covered under “wired-at-work” where access to a computer with email is a routine part of their job duties.

What do I need to do?

We know, there’s lots to digest. But we’re here to help. Remember, as implementation draws near, we’ll reach out to both you and your clients with information on any actions that may need to be considered.

Questions?

Additional information is available on our Trends and Insights page on principal.com. If you have any questions, contact your Principal representative or the Advisor Support Team at 800-952-3343.