You don’t need to keep up with the news to know America is facing a retirement crisis. Social Security is projected to reduce benefits by 2034. Millions of Americans—by some estimates, nearly half—lack significant retirement savings. For smaller businesses, the lack of access to employer-sponsored plans exacerbates the issue.
This moment brings opportunity. The SECURE 2.0 Act and new state-level mandates are reshaping retirement strategies, providing your firm with new opportunities to modernize offerings and act as a trusted advisor.
SECURE 2.0 has raised the incentives
In 2022, SECURE 2.0 ushered in one of the largest recent expansions to retirement legislation. Businesses with up to 100 employees gained a tax credit for covering 100% of plan startup costs, capped at $5,000 annually for three years. The legislation also introduced a new credit to offset employer contributions, phased in over five years: 100% in years one and two, 75% in year three, and so on.
But that’s not all. SECURE 2.0 also updated auto-enrollment rules. Employees must be enrolled at a 3% minimum, with the option to opt out or adjust their rate. That expanded eligibility lowers the barrier for part-time employees by requiring that those who have worked at least 500 hours per year for two consecutive years be eligible to participate in their employer’s 401(k) plan.
The other notable change is the introduction of Roth catch-up contributions for employees aged 50 or older who earn $145,000 or more annually. Before 2025, individuals aged 50 and older could save an extra $7,500 in catch-up contributions. That amount is now $10,000, or 150% of the catch-up limit.
Why it matters: Together, these changes make retirement more inclusive, especially for small employers trying to attract top talent. Understanding these credits and requirements gives you a perfect chance to optimize benefits and truly position your firm as a strategic advisor.
PEPs offer big plan benefits without headaches
Running a retirement plan is daunting for many small businesses. Pooled Employer Plans (PEPs), introduced under SECURE 1.0, simplify plan sponsorship by letting businesses share responsibilities through a centralized structure.
Traditionally, setting up a 401(k) required employers to bear the full weight of plan management, encompassing compliance and fiduciary responsibility, as well as annual audits. PEPs change that equation. By allowing unrelated businesses to participate in a shared plan overseen by a pooled plan provider (P3), PEPs centralize most administrative and fiduciary responsibilities. This structure reduces employer liability and operational overhead, making it simpler for business owners to offer quality retirement plans without becoming experts themselves.
For small business clients, a PEP can offer access to:
- Institutional-grade investments, usually reserved for large corporations
- Streamlined plan onboarding and employee education
- Centralized compliance monitoring and simplified reporting
Most importantly, SECURE 2.0 clarified that joining an existing PEP still qualifies as creating a "new" plan. This change unlocks full eligibility for the tax credits associated with plan startup and employer contributions. For business owners, PEPs deliver simplicity, security and savings.
Why it matters: When clients lean on your firm for retirement advice, recommending a PEP can help them skip administrative complexity while still offering a robust plan. It’s a way to add value without more risk.
State mandates are driving plan adoption
As of 2025, more than half of U.S. states have implemented or are in the process of rolling out state-sponsored retirement mandates. These laws generally require employers of a certain size to either offer their qualified plan or enroll employees into a state-facilitated individual retirement account (IRA) program. While these programs are a step in the right direction for expanding access, they often come with limitations.
State-run plans are typically Roth IRAs with lower annual contribution limits and no employer match option. Plan design and investment options are limited, which may lead to lower employee engagement. However, these mandates do serve an important purpose: They prompt businesses to consider retirement offerings.
For many employers, a private 401(k) plan offers more value:
- Higher contribution limits: $23,000 annually for employees under 50, additional catch-up for those 50+
- Employer match potential to stand out in competitive markets
- Flexibility to tailor features like vesting schedules and loan provisions
Why it matters: This is a prime opportunity to educate clients, clarify their options and recommend plans that meet both compliance and compensation goals. Your reliable advising throughout the process adds value and deepens client trust.
New trends look to reshape the landscape
Retirement strategy now extends beyond setting up a 401(k) plan to knowing how employees interact with it. Today’s forward-thinking employers are embracing new tools and innovations that offer enhanced financial wellness, portability and personalization.
For example, take Health Savings Accounts (HSAs). They are increasingly positioned as companion savings tools because they offer triple tax benefits:
- Contributions are tax-deductible
- Growth is tax-free
- Withdrawals for qualified medical expenses are also untaxed
These incentives make HSAs attractive to high earners and long-term savers, especially for future healthcare costs.
SECURE 2.0 also added provisions to simplify the transfer of small accounts from job to job. Additionally, the Department of Labor is working on a national retirement "lost and found" database to help workers locate old 401(k)s. These efforts aim to reduce plan leakage and increase continuity.
Lastly, artificial intelligence is transforming how participants engage with their retirement plans. From chatbots offering instant advice to algorithms suggesting personalized savings rates, AI tools are becoming integral to retirement readiness. They also help employers monitor behavior and optimize plan design.
Why it matters: Staying ahead of these trends helps clients future-proof their benefits strategy. Your firm can provide proactive guidance and reinforce their value throughout the year.
Embrace every opportunity
Whether you’re helping a client weigh their options or evaluating your own firm’s retirement plan, this is a critical time to take action. Powerful incentives, emerging solutions like PEPs and rising pressure from state mandates are moving retirement planning from optional to essential.
The good news? With the right resources and insights, you can help clients navigate these changes with confidence, building stronger businesses along the way.
A full, hour-long webinar is available on-demand for more details on the current retirement law environment, watch it here.
About the author
Guest contributor Zachary Keep has been involved in both the retirement industry for nearly 15 years and has extensive experience navigating compliance issues for both 403(b) and 401(k) plans.
