IRS Request for Information on SECURE 2.0 Act Saver’s Match

September 25, 2024

The U.S. Treasury Department and Internal Revenue Service (IRS) have issued a request for information (RFI) on implementing the Saver’s Match provision of the SECURE 2.0 Act, which, beginning in 2027, will convert the existing Saver’s Credit into a refundable tax credit payable as a contribution of up to $1,000 deposited into an eligible individual’s designed retirement savings vehicle. The IRS is also asking for input on promoting awareness of the new credit and plans to submit a report to Congress by July 1, 2026, outlining these efforts.

The Saver’s Match will match eligible contributions on a two-to-one basis. Eligible contributions include those to traditional and Roth IRAs; elective deferrals to 401(k) plans, 403(b) plans, 457(b) plans, SIMPLE IRAs, and SEP plans; voluntary after-tax employee contributions to a qualified retirement plan or annuity or 403(b) plan; and contributions to a 501(c)(18) plan. Generally, the Saver’s Match can be contributed back to these same vehicles. However, the Saver’s Match cannot be contributed to a Roth IRA or designated Roth account, which may present a challenge for many eligible individuals who currently use these accounts.

To facilitate the implementation of the Saver’s Match, the IRS is considering several logistical and procedural measures, including creating a system to identify eligible accounts and ensuring proper fund distribution. Additionally, the agency is seeking ways to streamline the process, such as simplifying IRA account openings and determining default destinations for mistaken contributions.

The RFI, which includes 29 questions across various topics, such as eligibility criteria, fund designation, and recovery tax for early distributions, is designed to gather feedback from stakeholders, including plan sponsors, tax preparers, and organizations serving lower-income individuals. Comments are due by Nov. 4, 2024.

The IRS emphasizes the need for a strategic approach to minimize costs, reduce burdens, and encourage plans to accept the Saver’s Match contributions. The RFI is part of ongoing efforts to ensure that the new program is accessible and efficient for both plan sponsors and eligible individuals.

MissionSquare, along with our trade association partners, has participated in discussions with the IRS about the Saver’s Match and will continue to stay engaged and provide input on behalf of our plan sponsors to ensure a successful rollout of the program.

For more information on SECURE 2.0 or other retirement policy issues, contact Erica McFarquhar, Deputy General Counsel, or Irica Solomon, Head of Government Affairs.