When it comes to the SECURE Act 2.0's affect on businesses, here are six areas leaders of startups should consider. Photo via Pexels

In an effort to encourage more workers to save for retirement, the federal government passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act that went into effect in December 2019, benefiting employers that established retirement plans with tax credits and providing employees with an avenue to save for retirement.

To build upon this retirement savings legislation, the U.S. House of Representatives recently passed a bill entitled, Securing a Strong Retirement Act of 2022, by an overwhelming bipartisan majority. This bill has been nicknamed SECURE Act 2.0 because it builds on the original SECURE Act. Although the SECURE Act 2.0 is not yet a law and requires consideration by the U.S. Senate, its powerful appeal in the U.S. House of Representatives is a strong indicator of further developments to retirement savings legislation in the not-so-distant future.

While the SECURE Act 2.0 affects all businesses, it appears that startups and small businesses may have the most to gain from the legislation in its current state. Below are six areas leaders of startups and small businesses should consider.

Boosts primary goals

The SECURE Act 2.0 is designed to boost the initial efforts of phase one by focusing on additional ways to address serious concerns about the adequacy of retirement savings in the U.S workforce. While it has always been critical for employees to take more responsibility for their retirement savings, now is the time to further elevate the conversation by appealing to employers and educating workers about investing early and the power of compound interest.

When more startups and small businesses offer retirement savings plans, it lays a foundation to increase the number of plan participants and improve their financial well-being. If the bill is passed, projections indicate at least a 10 percent increase in overall employee participation, which helps move the needle in a positive direction to advance retirement savings initiatives.

Offers employer incentives

The SECURE Act 2.0 provides significant incentives for startups and small businesses establishing retirement plans by doubling tax credits and number of employees who qualify. For businesses with fewer than 50 employees, the current tax credit is equal to 50 percent of administrative costs, with an annual cap of $5,000, for three years. However, the SECURE Act 2.0 would increase this to 100 percent for companies with up to 50 employees. It also creates a new credit that allows smaller employers to offset what they contribute to the plan, up to $1,000 per participant. This additional credit is available in full to employers with 50 or fewer employees, and a partial credit is available for employers with 51 to 100 employees. Penalties for some reporting mistakes will also be decreased, helping businesses avoid a negative impact on the bottom line.

Simplifies saving for employees

One of the best ways to save for retirement is through automatic payroll deductions that fund retirement accounts on a consistent basis. Many individuals are either uninformed, overlook the enrollment process, feel it is unaffordable or have other priorities. The SECURE Act 2.0 simplifies saving for employees by requiring employers that establish new plans to automatically enroll new hires in the plans at a pretax contribution level of three percent of their pay. The levels would escalate one percent annually up to at least 10 percent; however, they cannot exceed 15 percent of pay. There are some exceptions, including for small businesses with 10 or fewer employees. Although employees have the option to opt out of the program, in theory, it is simpler to remain enrolled, which can lead to increased financial security.

Appeals to multiple generations

With at least four generations currently in the workforce, employees are at different stages on their road to retirement, so the SECURE Act 2.0 takes the various groups into consideration. With older employees remaining in the workforce longer, the bill raises the age for required minimum distributions from 72-75 based on a phased approach. In addition, for employees aged 62-64, the catch-up contributions would be increased to $10,000 starting in 2024. However, starting in 2023, all catch-up contributions – affecting everyone age 50 and older – would have to be made to Roth accounts allowing the money to be taxed sooner. The benefit of Roth accounts is that distributions are tax-free.

The SECURE Act 2.0 provides the statutory basis for employers to match contributions for student loan debts based on employees’ student loan payments, even if employees are not making retirement contributions, which helps younger employees consumed with student loan debt continue to pay off loans, while getting retirement accounts started. It also addresses the influx of more long-term, part-time workers with at least 500 hours of service a year, by reducing the eligibility period for them to participate in a retirement plan from three consecutive years to two years, which is effective in 2023. With a broad appeal, startups and small businesses can rest assured that implementing a retirement plan will make a difference and benefit all workers.

Attracts and retains talent

When startups and small businesses evaluate their employee benefits, more weight is typically placed on providing health care benefits, as opposed to retirement plans, so they lag behind larger companies that offer 401(k) plans. As the competition for talent continues, smaller companies should consider establishing retirement plans to attract and retain top performers and gain a more competitive advantage. Through the SECURE Act 2.0, startups and small businesses would receive incentives to help level the playing field, so now is the time to develop a strategy and be prepared if/when the bill is passed.

Requires professional assistance 

Based on the current timeline, employers have roughly eight months to prepare, so it is vital to take the proper steps for their businesses. Establishing a 401(k) plan can be complicated and overwhelming for leaders at startups and small businesses, especially given their limited time and resources. Leaders should seek professional assistance rather than try it on their own for numerous reasons, including investment selection, fiduciary liability and payroll integration.

While providers such as banks, attorneys, accountants, insurance brokers and investment advisors may suffice, it is likely more efficient and cost effective to enlist a full-service HR provider that seamlessly handles HR administration and payroll processing, employee benefits, retirement services and more for a comprehensive approach to supporting startups and small businesses.

As startups and small businesses look for ways to move their companies forward, they should consider the benefits of establishing a 401(k) plan that not only attracts and retains top talent, but also helps to instill a greater sense of financial responsibility and well-being for the future of American families.

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John Stanton is vice president of retirement services operations with Houston-based Insperity.

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Houston robotics co. unveils new robot that can handle extreme temperatures

Hot New Robot

Houston- and Boston-based Square Robot Inc.'s newest tank inspection robot is commercially available and certified to operate at extreme temperatures.

The new robot, known as the SR-3HT, can operate from 14°F to 131°F, representing a broader temperature range than previous models in the company's portfolio. According to the company, its previous temperature range reached 32°F to 104°F.

The new robot has received the NEC/CEC Class I Division 2 (C1D2) certification from FM Approvals, allowing it to operate safely in hazardous locations and to perform on-stream inspections of aboveground storage tanks containing products stored at elevated temperatures.

“Our engineering team developed the SR-3HT in response to significant client demand in both the U.S. and international markets. We frequently encounter higher temperatures due to both elevated process temperatures and high ambient temperatures, especially in the hotter regions of the world, such as the Middle East," David Lamont, CEO of Square Robot, said in a news release. "The SR-3HT employs both active and passive cooling technology, greatly expanding our operating envelope. A great job done (again) by our engineers delivering world-leading technology in record time.”

The company's SR-3 submersible robot and Side Launcher received certifications earlier this year. They became commercially available in 2023, after completing initial milestone testing in partnership with ExxonMobil, according to Square Robot.

The company closed a $13 million series B round in December, which it said it would put toward international expansion in Europe and the Middle East.

Square Robot launched its Houston office in 2019. Its autonomous, submersible robots are used for storage tank inspections and eliminate the need for humans to enter dangerous and toxic environments.

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This article originally appeared on EnergyCapitalHTX.com.

Houston's Ion District to expand with new research and tech space, The Arc

coming soon

Houston's Ion District is set to expand with the addition of a nearly 200,000-square-foot research and technology facility, The Arc at the Ion District.

Rice Real Estate Company and Lincoln Property Company are expected to break ground on the state-of-the-art facility in Q2 2026 with a completion target set for Q1 2028, according to a news release.

Rice University, the new facility's lead tenant, will occupy almost 30,000 square feet of office and lab space in The Arc, which will share a plaza with the Ion and is intended to "extend the district’s success as a hub for innovative ideas and collaboration." Rice research at The Arc will focus on energy, artificial intelligence, data science, robotics and computational engineering, according to the release.

“The Arc will offer Rice the opportunity to deepen its commitment to fostering world-changing innovation by bringing our leading minds and breakthrough discoveries into direct engagement with Houston’s thriving entrepreneurial ecosystem,” Rice President Reginald DesRoches said in the release. “Working side by side with industry experts and actual end users at the Ion District uniquely positions our faculty and students to form partnerships and collaborations that might not be possible elsewhere.”

Developers of the project are targeting LEED Gold certification by incorporating smart building automation and energy-saving features into The Arc's design. Tenants will have the opportunity to lease flexible floor plans ranging from 28,000 to 31,000 square feet with 15-foot-high ceilings. The property will also feature a gym, an amenity lounge, conference and meeting spaces, outdoor plazas, underground parking and on-site retail and dining.

Preleasing has begun for organizations interested in joining Rice in the building.

“The Arc at the Ion District will be more than a building—it will be a catalyst for the partnerships, innovations and discoveries that will define Houston’s future in science and technology,” Ken Jett, president of Rice Real Estate Company, added in the release. “By expanding our urban innovation ecosystem, The Arc will attract leading organizations and talent to Houston, further strengthening our city’s position as a hub for scientific and entrepreneurial progress.”

Intel Corp. and Rice University sign research access agreement

innovation access

Rice University’s Office of Technology Transfer has signed a subscription agreement with California-based Intel Corp., giving the global company access to Rice’s research portfolio and the opportunity to license select patented innovations.

“By partnering with Intel, we are creating opportunities for our research to make a tangible impact in the technology sector,” Patricia Stepp, assistant vice president for technology transfer, said in a news release.

Intel will pay Rice an annual subscription fee to secure the option to evaluate specified Rice-patented technologies, according to the agreement. If Intel chooses to exercise its option rights, it can obtain a license for each selected technology at a fee.

Rice has been a hub for innovation and technology with initiatives like the Rice Biotech Launch Pad, an accelerator focused on expediting the translation of the university’s health and medical technology; RBL LLC, a biotech venture studio in the Texas Medical Center’s Helix Park dedicated to commercializing lifesaving medical technologies from the Launch Pad; and Rice Nexus, an AI-focused "innovation factory" at the Ion.

The university has also inked partnerships with other tech giants in recent months. Rice's OpenStax, a provider of affordable instructional technologies and one of the world’s largest publishers of open educational resources, partnered with Microsoft this summer. Google Public Sector has also teamed up with Rice to launch the Rice AI Venture Accelerator, or RAVA.

“This agreement exemplifies Rice University’s dedication to fostering innovation and accelerating the commercialization of groundbreaking research,” Stepp added in the news release.