Church 403b
Churches are not exempt from the SECURE 2.0 Act’s provisions; however, certain exceptions apply to church retirement plans.
SECURE 2.0 Provisions Affecting Church Retirement Plans
- Automatic Enrollment: SECURE 2.0 mandates automatic enrollment in new 401(k) and 403(b) plans starting in 2025. However, church plans are exempt from this requirement, allowing them to decide whether to implement automatic enrollment .
- Long-Term Part-Time Employee Eligibility: The Act extends eligibility for long-term part-time employees in 403(b) plans. Church plans are not subject to this change, so they are not required to extend eligibility to long-term part-time employees .
- Catch-Up Contributions: SECURE 2.0 increases catch-up contribution limits for individuals aged 60 to 63. Church plans are subject to these new limits, provided they are Roth contributions for participants earning at least $145,000 in the prior year .
- Student Loan Repayment Matching: The Act allows employers to match student loan repayments as elective deferrals. Church plans can adopt this provision, pending future IRS guidance .
Summary
While churches are not exempt from SECURE 2.0, they benefit from certain exemptions, particularly concerning automatic enrollment and long-term part-time employee eligibility. Church retirement plans remain subject to other provisions, such as catch-up contributions and potential student loan repayment matching, depending on plan specifics and future guidance.
