The President signed the Appropriations bill which included SECURE 2.0. It is “enacted”. The new law has twists. Here’s one. New 401(k)s and 403(b)s must be automatically enrolled and increased, effective after 12-31-24. But there’s more to that than first appears. 1)
401(k) & 403(b) plans established before the enactment date (today) don’t have to be auto enrolled & escalated. But plans “established” today or later will have to be converted to auto in 2025. Advisors & consultants need to let new plan sponsors know, or 2025 could be a shock 2)
There are exceptions for new employers (3 years) and small employers (10 or fewer employees). 3)
This will likely be a game changer. The new norm will be for plans to be auto enrolled at 3% to 10% & then for auto increases to be 1% per year up to at least 10% & possibly 15%. This was a heavy lift but the retirement pros in Congress got through the political hurdles. (Done)
How a bill become a law. SECURE Act 2.0 in cartoons.
youtube.com/watch?v=Otbml6…
