How SECURE 2.0 Helps Small Businesses Compete Amid Tight Labor Market



The recently passed SECURE Act 2.0, which was included in the Consolidated Appropriations Act (CAA) of 2023 is poised to give small business owners a boost in the current market for talent which is still incredibly tight in 2023. This new competitive edge can be found within the 92 provisions employers can utilize, some beginning this year, others in 2024, to ease the burden of retirement benefits, which are a sticking point for many in today’s workforce. In fact, 62% of workers worldwide state that the availability of a retirement plan is a top consideration when determining if they will stay with a company or even accept an offer, Forbes reports1. Conversely, just a quarter (26%) of business owners currently offer 401(k) retirement plans, according to recent studies. With the passage of SECURE 2.0, this statistic is likely to change as many of its provisions are designed to enable small businesses to add this benefit to their own offerings through various credits and cost-saving incentives. Not only does the new law give employers an edge in attracting and retaining talent, but it also provides employees the ability to better prepare for retirement.

According to a recent study by the AARP, nearly 48% of U.S. workers do not have access to retirement plans at work2. As previously mentioned, only a quarter of small business employers even offer access to a 401(k) plan. A key reason for this, Inc. reports, is the cost and administrative burden of operating employer-sponsored retirement plans. Today’s private sector insurance providers have few offerings that make sense for employers with less than 100 employees3. One way SECURE 2.0 alleviates this burden is by providing a three-year tax credit to organizations with 50 or fewer employees which will cover 100% of the costs associated with starting and administering an employer-sponsored retirement plan. This became effective on Jan. 1, 2023 and will also subsidize the annual costs of educating employees up to $5000. Employers with 51-100 employees may also use the three-year tax credit for 50% of the same qualified costs. Finally, there is a five-year tax credit for eligible employer contributions, up to $1,000 per employee. The credit percentage starts at 100% and is phased-out over 5 years.

As these incentives make employee retirement plans more affordable, small businesses and firms that take advantage of them are positioned to better compete with larger organizations in today’s tight labor market. However, credits are not the only provisions making it easier for employers to offer workers what they want. Plan administration costs are further addressed by SECURE 2.0 beginning Jan. 1, 2024, as the threshold for involuntary distributions will increase from $5,000 to $7,000 which should lessen the impact of uncashed checks, outdated address changes and potential audit issues related to situations like regular notices for small plan balances. Further, current law also dictates that various retirement plan notices and disclosures must be distributed to all eligible employees regardless of whether they made an election to participate in the retirement plan. SECURE 2.0 will remove the requirement for notice delivery to unenrolled participants if those participants receive: 1) an SPD upon eligibility, (2) an ‘annual reminder notice’ and (3) any other document the participant is entitled, on request. Finally, SECURE 2.0 grants employees the ability to self-certify for deemed hardship distributions from 401(k) plans rather than requiring employers to first review these requests.

Furthermore, within the first two years of SECURE 2.0’s passage, ADP reports the plans will be required by the U.S. Department of Labor and Treasury to consolidate multiple participant notices into one document. By reducing the paperwork associated with these aspects of plan administration, the likelihood of errors and penalties becomes much lower. Moreover, those organizations that take advantage of these provisions might see improvements elsewhere as studies show that lower financial stress increases employee morale and overall productivity4. Between its various incentives that essentially subsidize many costs associated with offering and administrating employee retirement plans, the provisions of SECURE 2.0 stand to offer smaller organizations an opportunity to become more competitive in the ongoing war for talent.

For more information on how SECURE 2.0 can help you attract and maintain talent, contact MICPA partner Victor Hicks II, CFP, AIF, wealth advisor, Lumin Financial LLC. 

Or learn more about leveraging changes to 401(k) Plan and meet Victor at Elevate on June 22. 

Victor Hicks II, CFP®, AIF® is a Wealth Advisor at Lumin Financial LLC, specialized in 401(k) plans for small-midsized employers. Since 1995, Victor has advised clients on issues related to plan design, employee education, investments, and fiduciary compliance. Lumin Financial is an independent registered investment adviser.

He can be reached at, or by phone: (248) 936-9480.

LUMIN FINANCIAL LLC | 2000 Town Center, Ste. 1825 | Southfield, MI 48075


  1. Glaze, Andrew. “Why Offering Retirement Benefits Helps Attract…Forbes. 24 Aug. 2022. Accessed on 24 Feb. 2024.
  2. New AARP Research: Nearly Half of Americans Do Not Have Access…AARP. 13 Jul. 2022. Accessed on 22 Feb. 2023.
  3. Angell, Melissa. “How Secure 2.0 Help Small Businesses…Inc. 30 Jan. 2023. Accessed 3 Mar. 2023.
  4. SECURE 2.0: What Employers Need to Know – Now.ADP. 2023. Accessed on 3 Mar. 2023.



Source: Lumin Financial

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