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What’s That New Deduction in My Paycheck? Dealing with New 401(k) Auto-Enrollment Rules

January 23, 2024 (3 min read)

For plan years beginning on or after January 1, 2025, most cash or deferred arrangements (e.g., 401(k) plans and 403(b) plans) established after the SECURE 2.0 Act’s enactment date will be required to have an automatic enrollment feature. Such plan features automatically enroll all eligible employees at described deferral rates and absent any contrary instructions from the employee, provide for a continuing elective deferral contribution invested in the plan's qualified default investment alternative (like a target date retirement fund). Most existing plans are grandfathered from this requirement. Auto-enrollment is just one of the many new SECURE 2.0 Act provisions. Are you prepared?

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Featuring the latest updates from your Practical Guidance account.    

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    • Retirement Plans. IRS issues guidance regarding Pension-Linked Emergency Savings Accounts (PLESAs) provided under Section 127 of the SECURE 2.0 Act which accounts may be permitted in a 401(k) plan for plan years beginning after December 31, 2023. Notice 2024-22.
    • Retirement Plans. IRS releases a list of changes to the requirements for pre-approved plan providers applying for opinion letters for the fourth remedial amendment cycle. Notice 2024-3.
    • Retirement Plans. IRS releases guidance on certain provisions of the SECURE 2.0 Act. Notice 2024-02.
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