Safety & Financial Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute legal, tax, or financial advice. Retirement plan regulations are subject to change and vary based on specific organizational structures. Always consult with a qualified ERISA attorney, tax professional, or certified financial planner before making significant changes to your company’s retirement plan or your personal investment strategy.
As of February 2026, the retirement landscape in the United States has undergone its most significant transformation in decades. At the heart of this evolution is the SECURE 2.0 Act, a sweeping piece of legislation designed to make it easier for employees to save and more incentivized for employers to provide robust benefits. Specifically, the provisions surrounding the SECURE 2.0 company match have redefined how organizations approach recruitment, retention, and the financial health of their workforce.
In simple terms, SECURE 2.0 is the “Setting Every Community Up for Retirement Enhancement” Act 2.0. It builds upon the original 2019 SECURE Act by introducing over 90 new provisions aimed at increasing retirement savings. For employers, the most potent tool in this kit is the ability to leverage matching contributions in creative ways—such as matching student loan payments or offering Roth-style matches—to drive 401(k) enrollment to record highs.
Key Takeaways for 2026
- Automatic Enrollment: New 401(k) and 403(b) plans are now required to include automatic enrollment and automatic escalation.
- Student Loan Match: Employers can now “match” an employee’s student loan payments with contributions to their 401(k) plan, even if the employee isn’t contributing directly to the 401(k).
- Roth Matching: Employers have the option to provide matching contributions on a Roth (after-tax) basis, providing employees with more tax flexibility.
- Small Business Credits: Massive tax credits now offset up to 100% of the administrative costs and a portion of employer contributions for small businesses.
Who This Guide Is For
This guide is specifically crafted for HR professionals, benefits administrators, CFOs, and small business owners who want to navigate the complexities of SECURE 2.0. Whether you are looking to revitalize an existing plan or launch a new one, understanding how to utilize the company match is your primary lever for increasing participation and fostering a culture of financial wellness.
The Evolution of the Employer Match in 2026
For years, the employer match was a binary tool: if an employee contributed, the company gave a percentage. If the employee didn’t contribute, they received nothing. This created a significant gap, particularly for younger employees burdened by debt or lower-income workers who couldn’t afford to see their take-home pay decrease.
SECURE 2.0 has effectively shattered this binary. In the current 2026 environment, the match is no longer just a “bonus” for those who can afford to save; it is a strategic bridge. By expanding the definition of what “qualifies” for a match, the federal government has empowered employers to address the actual financial hurdles preventing employees from enrolling in 401(k) plans.
Section 101: Mandatory Automatic Enrollment and Its Impact
One of the most impactful components of SECURE 2.0 is Section 101, which mandates that most new 401(k) and 403(b) plans established after December 29, 2022, must include an automatic enrollment feature.
How It Works
As of 2026, for applicable new plans, employees must be automatically enrolled at a participation rate of at least 3% but no more than 10%. Furthermore, the plan must include an automatic escalation feature that increases the contribution by 1% each year until it reaches at least 10% (but not more than 15%).
Driving Enrollment Through Inertia
The psychology of “opt-out” versus “opt-in” is well-documented. By making enrollment the default state, employers remove the “analysis paralysis” that often plagues new hires. When combined with a clear communication strategy about the company match, this provision ensures that employees begin building wealth from day one.
Common Mistake: Many employers fail to realize that while the law mandates auto-enrollment for new plans, adding it to existing plans (even if not legally required) is one of the fastest ways to boost participation and satisfy non-discrimination testing.
Section 110: The Student Loan Match Game-Changer
Perhaps the most talked-about provision for 2026 is Section 110, which allows employers to treat “qualified student loan payments” as elective deferrals for purposes of matching contributions.
Why This Drives Enrollment
For a significant portion of the workforce—particularly Millennials and Gen Z—the primary barrier to 401(k) enrollment is the choice between paying off high-interest debt and saving for a distant retirement. Often, the debt wins.
Under SECURE 2.0, an employee can pay $500 toward their student loans, and the employer can “match” that $500 (based on the plan’s formula) by depositing funds into the employee’s 401(k) account. This allows the employee to:
- Aggressively pay down debt.
- Simultaneously build a retirement nest egg.
- Benefit from the “free money” of a company match they would otherwise lose.
Implementation Logistics
To utilize this, employers must ensure their plan documents are updated to allow for student loan matching. Employees must also provide self-certification of their loan payments annually. This provision turns the 401(k) from a “savings account I can’t afford” into a “wealth-building tool I get for free while I pay my loans.”
Section 604: Offering Roth Matching Contributions
Prior to SECURE 2.0, employer matching contributions were almost always made on a pre-tax basis. This meant that while the money grew tax-deferred, it would be taxed as ordinary income upon withdrawal in retirement.
Section 604 changed this by allowing employers to give employees the option of receiving matching contributions on a Roth basis.
The Benefit to the Employee
Roth matches are particularly attractive to younger employees who are currently in a lower tax bracket than they expect to be in during retirement. By choosing a Roth match, the employee pays taxes on the match now (it is treated as taxable income), but the funds grow and are eventually withdrawn tax-free.
The Strategic Edge for Employers
Offering a Roth match demonstrates a high level of benefit flexibility. It shows that the organization understands the diverse tax needs of its workforce. When explaining the 401(k) plan to prospective hires, the ability to choose between a Traditional and Roth match is a sophisticated “human-first” benefit that can tip the scales in a competitive hiring market.
Section 102: Making the Match Affordable for Small Businesses
A common concern for small business owners is the cost of providing a match. SECURE 2.0 addresses this head-on with Section 102, which significantly expands the tax credits available for small business pension plan startup costs.
The 100% Credit
For businesses with up to 50 employees, the Act increases the startup credit from 50% to 100% of administrative costs, up to a limit of $5,000 per year for the first three years.
The Contribution Credit
Even more significantly, there is a tax credit based on the employer’s matching contributions. For the first two years of a new plan, the government provides a credit of 100% of the amount contributed by the employer (up to $1,000 per employee). This credit phases out over five years:
- Years 1 & 2: 100% credit
- Year 3: 75% credit
- Year 4: 50% credit
- Year 5: 25% credit
For a small business, this effectively means the federal government is subsidizing the first $1,000 of the match for each employee earning less than $100,000. This removes the “cost” barrier and allows small firms to offer competitive matches that drive 100% enrollment.
Leveraging Emergency Savings Accounts (PLEAs)
Another barrier to 401(k) enrollment is the fear of “locking money away” that might be needed for emergencies. SECURE 2.0 introduced Pension-Linked Emergency Savings Accounts (PLEAs).
Employers can now offer a “sidecar” emergency account within the 401(k) plan. Employees can contribute up to $2,500 (post-tax) to this account. Crucially, these contributions must be eligible for the company match at the same rate as 401(k) contributions.
This drives enrollment because it provides a safety net. Employees know that if they have a car repair or medical bill, they can access their emergency funds without a 10% penalty, all while still capturing the full employer match.
Communication Strategies to Boost Participation
Having the best SECURE 2.0 features means nothing if your employees don’t understand them. To truly utilize the company match to drive enrollment, your communication must be “human-first.”
1. The “Free Money” Narrative
Stop talking about “basis points” and “deferred compensation.” Start talking about “The 100% Return.” Explain that the company match is an immediate 50% or 100% return on their investment—something no stock market can guarantee.
2. Targeted Outreach for Student Loan Holders
Don’t just send a company-wide email. Use your HRIS data (with privacy considerations) or work with your recordkeeper to identify demographics likely to have student debt. Send them a specific “Student Loan Match Guide” that shows exactly how their monthly loan payment can trigger a $2,000 annual deposit into their retirement account.
3. Visual Comparisons
Use tables to show the difference between “Participating” and “Not Participating.” | Feature | No Enrollment | With 401(k) + Match | | :— | :— | :— | | Your Contribution | $0 | $200/mo | | Employer Match | $0 | $200/mo | | Tax Savings | $0 | ~$44/mo (Pre-tax) | | Total Monthly Gain | $0 | $444 Value |
Common Mistakes Employers Make with SECURE 2.0
Even with the best intentions, several pitfalls can undermine your enrollment efforts.
- Inconsistent Math: Ensure your student loan match logic matches your 401(k) match logic. If you match 50% of the first 6% of pay for 401(k) deferrals, you must apply that same math to student loan payments.
- Poor Recordkeeper Integration: Not all payroll and recordkeeping systems were ready for SECURE 2.0. Before announcing a student loan match, ensure your vendor can actually track and process these “qualified” payments.
- Ignoring Part-Time Employees: SECURE 2.0 lowers the threshold for long-term, part-time employees to join the plan. Failing to include them can lead to significant compliance issues and fines.
- Overcomplicating the Choice: When offering Roth vs. Traditional matches, provide a simple “Help Me Decide” tool. Too much choice can lead to “decision fatigue,” causing employees to opt out entirely.
Implementation Checklist for HR Teams
To successfully utilize the SECURE 2.0 company match provisions by the end of 2026, follow these steps:
- Audit Your Current Plan Document: Work with your ERISA counsel to see which SECURE 2.0 provisions are mandatory for you and which are optional.
- Consult Your Recordkeeper: Confirm their capability to handle Student Loan Matching (Section 110) and Roth Matching (Section 604).
- Survey Your Employees: Find out if student loan debt is a major barrier. If 40% of your staff has debt, the Section 110 match should be your top priority.
- Update Onboarding Materials: Ensure that your new hire packets emphasize automatic enrollment and the immediate benefits of the match.
- Review Small Business Credits: If you have under 100 employees, speak with your tax advisor to ensure you are claiming the SECURE 2.0 credits on your next filing.
Conclusion: The Future of the Workplace Benefit
As we navigate 2026, the definition of a “competitive” workplace has changed. It is no longer enough to offer a standard retirement plan. The SECURE 2.0 Act has raised the bar, turning the 401(k) into a comprehensive financial wellness platform.
By utilizing the company match to address student loans, providing the flexibility of Roth contributions, and leveraging the power of automatic enrollment, you aren’t just checking a compliance box. You are actively investing in the long-term stability of your workforce. This, in turn, reduces turnover, increases employee engagement, and builds a brand known for truly caring about its people.
The next step for your organization is clear: move beyond the traditional match. Start a conversation with your plan advisor today about implementing Section 110 and Section 604. Your employees—and your retention rates—will thank you.
Would you like me to draft a sample announcement email for your employees regarding the new Student Loan Match feature?
FAQs
1. Does every company have to offer a student loan match?
No. Offering a student loan match under SECURE 2.0 is currently optional for employers. However, it is highly recommended for industries with high percentages of college-educated recruits to maintain a competitive benefits edge.
2. Is the automatic enrollment mandatory for all 401(k) plans?
Not all. Mandatory auto-enrollment only applies to new 401(k) and 403(b) plans established after December 29, 2022. Plans that existed before this date are “grandfathered” in and are not legally required to implement auto-enrollment, though many choose to do so to boost participation.
3. How do employees prove they made a student loan payment?
Under current IRS guidelines, employees can self-certify that they have made the payments. Employers are allowed to rely on this certification, though some choose to use third-party verification services to streamline the process and ensure accuracy.
4. Can an employee get both a 401(k) match and a student loan match?
Yes, but the total match cannot exceed the maximum matching contribution allowed under the plan. For example, if the plan matches up to 6% of an employee’s salary, and the employee gets a 3% match for 401(k) contributions, they can still get an additional 3% match for their student loan payments.
5. What happens if an employee opts out of automatic enrollment?
Employees always have the right to opt out. If they are automatically enrolled, they typically have 90 days to withdraw their contributions and opt out of the plan without the usual tax penalties for early withdrawal.
References
- U.S. Senate Finance Committee:
- Internal Revenue Service (IRS): Notice 2024-2: Miscellaneous Changes Under SECURE 2.0
- U.S. Department of Labor (DOL):
- Journal of Pension Benefits: Understanding the Impact of Mandatory Auto-Enrollment
- Society for Human Resource Management (SHRM): Leveraging Student Loan Matches for Retention
- Congressional Research Service (CRS): SECURE 2.0 and the Evolution of Retirement Savings
- National Association of Plan Advisors (NAPA): Section 604 Roth Match Implementation Guide
- IRS Tax Credits for Small Business: Form 8881, Credit for Small Employer Pension Plan Startup Costs
