Auto Enrollment

Originally Published on 6/15/23

Auto-enrollment in retirement plans has become more and more common in recent years. Starting with the 2025 tax year, the SECURE Act 2.0 will require employers that establish new 401(k) or 403(b) plans to automatically enroll their employees in those new 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.

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the advisability of making auto-enrollment in retirement plans mandatory.

Below is a summary of the debate that ensued between the two professors.