On January 10, 2025, the Treasury Department and the Internal Revenue Service issued Proposed Regulations on the automatic enrollment requirements introduced by SECURE 2.0. The Proposed Regulations incorporate and expand upon previously issued interim guidance under IRS Notice 2024-2 and address various open issues.
SECURE 2.0
SECURE 2.0 generally requires that new 401(k) and 403(b) plans that are established on or after December 29, 2022 (the “enactment date”), automatically enroll employees at a uniform contribution rate of 3% (but not more than 10%) and also automatically increase the contribution rate by 1% annually, up to at least 10% (with a cap at 15%).
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