Amid continued uncertainty over the future of Social Security, Congress is taking proactive steps to encourage retirement savings. Lawmakers passed the SECURE Act in 2019 to further incentivize retirement planning, and they followed with the SECURE 2.0 Act in December.

In a recent analysis, Bloomberg Law called SECURE 2.0 one of the most significant pension reform bills in recent history because it offers incentives for employers to establish and maintain retirement plans and creates more opportunities for the participant.

While the SECURE Act softened rules around saving and withdrawing from retirement accounts, the SECURE 2.0 Act is a further enhancement that creates more flexibility and accessibility.

For example, if a retirement plan participant is between 60 to 63, they can now add up to $10,000 to their account as a special catch-up contribution. However, if an individual has annual earnings of $145,000 or more, the catch-up must be after-tax and placed into a Roth account. And for higher earners, that is a positive development because of future tax benefits possible through Roth programs.

Another interesting provision increases the required minimum distributions age from 72 to 73, and in 2033, the age increases again to 75. This will create more flexibility for millions who want to further delay retirement-fund distributions without facing penalties.

The legislation also includes an automatic enrollment requirement for eligible employees, which goes into effect on any new retirement plan created after Dec. 29, 2022, Starting in 2025, those employees will be enrolled at a minimum contribution rate of 3%. In addition, a new auto-escalation feature must be added to this same demographic of plans.

Anyone who is paying attention knows that student-loan debt is a growing concern across the country, and SECURE 2.0 addresses the problem head on. Beginning in 2024, companies can “match” employee student loan payments with matching contributions to employee retirement accounts.

If there is anything worse than a lack of savings, it would be high debt. This new rule is a major benefit to any person currently making student loan payments instead of making 401k contributions. Now, a company can incentivize and reward an employee who is working hard to pay off debt.

Meanwhile, the new law contains an enhanced tax incentive that may be hard for employers to pass up. An existing tax credit for retirement-plan-related administrative costs was increased from 50% to 100% under the new law. The provision applies to businesses with up to 50 workers, and those employers could receive up to $5,000 in benefit.

In all, the SECURE 2.0 Act contains 92 provisions to promote savings and to incentivize employers to offer plans. As with any new law surrounding finances, investors and businesses should consult with financial professionals before implementing changes. It’s hard to know what the future holds for Social Security. But whatever happens, the importance of retirement savings could not be more critical, and it is good to see the path to long-term savings just got a little easier.