SECURE 2.0’s Saver’s Match Takes Shape

The Internal Revenue Service (the “IRS”) recently issued Notice 2026-48 (the “Notice”), announcing its intent to issue proposed regulations regarding the new Saver’s Match program established by the SECURE 2.0 Act of 2022 (“SECURE 2.0”).

The Notice provides the first detailed guidance on the operation of the Saver’s Match program and outlines rules the IRS expects to include in future proposed regulations. The Saver’s Match will first be available in 2027, and plan sponsors may choose whether their plans will accept Saver’s Match contributions.

What is the Saver’s Match?

Beginning in the 2027 tax year, eligible low- and moderate-income individuals who make qualified retirement savings contributions may qualify to receive a federal matching contribution of up to 50% of the first $2,000 of their contributions, resulting in a maximum annual federal contribution of $1,000. The matching contribution will be funded by the Treasury and deposited directly into an eligible 401(k), 403(b), or governmental 457(b) plan or traditional individual retirement account (“IRA”), so long as that retirement plan or IRA accepts, and is eligible to receive, Saver’s Match contributions. 

The Saver’s Match will replace the current Saver’s Credit for most retirement plan and IRA contributions. Currently, the Saver’s Credit grants eligible low- and moderate-income filers a nonrefundable tax credit for qualified contributions to their eligible retirement accounts. By contrast, the Saver’s Match provides a direct federal contribution to the participant’s retirement savings vehicle, even if the participant has little or no income tax liability.

The Notice confirms that a retirement plan is not required to accept Saver’s Match contributions. To accept Saver’s Match contributions, the plan must be amended to provide for their acceptance, and the plan must be designated by the participant as the destination for such contributions. The IRS anticipates issuing model Saver’s Match amendment language in future guidance. If an employer’s plan does not accept Saver’s Match contributions, an eligible individual may instead designate an eligible IRA that accepts the contributions.

Things Plan Sponsors May Want to Consider Now

Although no immediate action is required, plan sponsors may want to consider whether accepting Saver’s Match contributions would be beneficial for their plans and participants. Plan sponsors may also want to consider the demographics of their workforce and assess whether a meaningful portion of their employee population may be eligible for the Saver’s Match. For employers with a significant number of low- and moderate-income employees, permitting participants to direct federal Saver’s Match contributions into their retirement plan account could provide an additional incentive to save.  

As additional IRS guidance becomes available, plan sponsors may want to discuss with their service providers the administrative processes and costs that would be involved in accepting Saver’s Match contributions. 

If you have any questions about the Saver’s Match, please contact your Employee Benefits and Executive Compensation counsel.

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