SECURE Act 2.0 Will Soon Require Auto-Enrollment

Starting with the 2025 tax year, the SECURE Act 2.0 will require employers that establish new 401(k) or 403(b) plans to auto-enroll employees in the savings plans. The minimum auto-enrollment contribution rate will range from 3% to 10%. Each year, the minimum contribution rate will then increase by 1% until the rate reaches 15%. Under the law, small business employers with 10 or fewer employees and new businesses will be exempt from the auto-enrollment requirement. Employers will also be permitted to automatically transfer employees' account balance to a new retirement plan if the balance is relatively low. For more information on the benefits of the auto-enrollment feature, visit Tax Facts Online. : Q 8564.