SECURE 2.0 Adoption Trends: Plan Sponsors Lean Into Enhanced Catch-Up Contributions

New Vanguard data analyzing retirement plan activity through year-end 2025 offers an early snapshot of SECURE 2.0 provision adoption trends, showing plan sponsors are gravitating toward provisions that are straightforward to implement and aligned with long-term retirement savings, while more complex or liquidity-focused features are seeing slower uptake.

The analysis, written by Vanguard Head of Defined Contribution Research Jeffrey W. Clark with data analysis support from Allyssa Utecht, found plan sponsors are quickly warming to expanded catch-up contributions for participants ages 60 to 63. Beginning in 2025, sponsors gained the option to increase the catch-up limit from the standard $7,500 to $11,250, allowing eligible participants to contribute significantly more in the final stretch before retirement.

Adoption has been overwhelming. By year-end 2025, the analysis found 91% of Vanguard-administered plans had implemented the higher catch-up limit.

Participants responded in kind. Among those ages 60 to 63 in plans offering the enhanced feature, 21% reached the 402(g) elective deferral maximum of $24,500. Of those “maximizers,” more than 90% also made catch-up contributions. Two-thirds of catch-up contributors exceeded the standard limit, and 9% hit the full enhanced catch-up amount—bringing total annual contributions to $35,750.

Notably, about one-quarter of catch-up contributors directed some portion of those dollars to Roth, signaling growing interest in tax diversification and long-term flexibility.

Auto portability gains traction

The new analysis also shows auto portability is gaining traction. A SECURE 2.0 provision allows eligible plan balances to transfer automatically into a participant’s new employer-sponsored plan rather than being left behind or rolled into potentially higher-fee IRAs. SECURE 2.0 also raised the involuntary cash-out threshold from $5,000 to $7,000.

By the end of 2025, the Vanguard analysis found 7% of its plans had adopted auto portability.

This comes on the heels of other recordkeepers announcing auto portability data. In Sept. 2025, Empower announced that over 11,000 of the plans it works with have signed up for auto portability, while Fidelity reported in Nov. 2025 that 9,200 Fidelity plans had adopted auto portability, representing more than one-third of its 26,500 corporate defined contribution plans.

While Vanguard’s 7% figure may appear modest, the long-term implications are significant as small balances are particularly vulnerable to cashouts, fragmentation, and fee erosion. Auto portability offers a structural solution to retirement savings leakage—an issue policymakers have long targeted.

Self-certification adoption slow

SECURE 2.0 also introduced self-certification for hardship withdrawals, allowing plan participants to attest that they meet IRS criteria without submitting documentation upfront.

But adoption of self-certification remains limited, with only 3% of Vanguard plans offering the provision as of year-end 2025. Most plans (87%) use Vanguard’s summary offer approach to hardship withdrawals, which removes the need to submit supporting documentation up front while still requiring participants to keep records. Ten percent of plans continue to require documentation at the time of withdrawal.

Modest use of emergency, disaster withdrawals

The Vanguard analysis shows liquidity-focused SECURE 2.0 provisions more broadly are seeing cautious adoption.

Emergency expense withdrawals, which allow participants to take up to $1,000 annually penalty-free (with a 3-year repayment option), were offered in just 4% of Vanguard plans in 2025. Only 0.4% of participants initiated such a withdrawal.

Qualified disaster recovery distributions (QDRDs), which permit penalty-free withdrawals of up to $22,000 per federally declared disaster with a 3-year repayment window, were adopted by 16% of plans. Usage remained low, with 0.2% of participants tapping the provision.

Similarly, the new domestic abuse withdrawal option—allowing eligible participants to withdraw the lesser of $10,000 (indexed) or 50% of their vested balance penalty-free—was available in 6% of plans, with just 0.1% of participants utilizing it.

These provisions address important and often urgent financial needs, but their limited uptake suggests sponsors are approaching short-term liquidity tools more deliberately, weighing administrative complexity, fiduciary considerations, and potential unintended consequences.

SECURE 2.0’s early signals

The early signals highlighted in the report offer insight into how SECURE 2.0 is reshaping plan design in practice.

“Overall, adoption patterns so far suggest that plan sponsors are prioritizing optional provisions that support long-term retirement savings and taking a more selective approach to features focused on short-term liquidity,” Vanguard’s Clark wrote in concluding the report. “Additional options introduced by SECURE 2.0, including employer contributions treated as Roth and pension-linked emergency savings accounts (PLESAs), have generated minimal to no interest from plan sponsors.”

Check out the Vanguard analysis at this link: Which optional provisions of SECURE 2.0 are taking hold?

SEE ALSO:

• A Playbook on IRS Regs for Roth Catch-Up Contribution Requirements Under SECURE 2.0
• 2025: A Breakthrough Year for Portability
• A Third of Fidelity 401(k)s Have Adopted Auto Portability