Section 101 of Setting Every Community Up for Retirement Enhancement (“SECURE”) 2.0 mandated, for the very first time, a special automatic enrollment arrangement be added to all new 401(k) and 403(b) plans established on or after the enactment of SECURE 2.0 (i.e., plans established on or after December 29, 2022). The provision, which is set forth in Code Sec. 414A, is first effective beginning January 1, 2025, and earlier this year (January 14, 2025), the Internal Revenue Service (“IRS”) issued proposed regulations (“Proposed Regulations”) that provide much-needed guidance on how this mandate works. The Proposed Regulations provide important preliminary guidance on how to implement the mandate and what plans are impacted by the new law. A summary of the guidance, in question-and-answer (“Q&A”) format, is set forth in the article.
In this TAXES – The Tax Magazine article, “Mandatory Automatic Enrollment for New 401(k)/403(b) Plans Gets Much Needed Guidance,” Groom principals Elizabeth Thomas Dold and David Levine cover key aspects of the IRS proposed regulations for 401(k) and 403(b) plans, including which plans are covered, how the automatic enrollment features operate, and what exceptions apply. They also outline compliance steps and special considerations for mergers, acquisitions, and multiple employer plans.
To read the article, click here.
