In a letter submitted to the IRS and Treasury, the AICPA responded to proposed regulations related to automatic enrollment requirements authorized under SECURE 2.0.
The SECURE 2.0 Act generally requires newly established 401(k) and 403(b) plans to automatically enroll eligible employees beginning with the 2025 plan year.
Unless an employee opts out, employers must automatically enroll an employee in a plan at an initial contribution rate of at least 3% of their pay and automatically increase that contribution rate by 1% each year until it reaches at least 10% of an employee’s pay.
Based on the recent proposed regulations, the AICPA made three recommendations:
- Investment requirements for trustee-directed plans
- Determining employee count for small businesses
- Definition of predecessor employer
“The purpose for our letter is to provide input to Treasury and the IRS in order to further clarify the rules and provide recommendations to help with the implementation of the auto-enrollment provision of the law,” said Kristin Esposito, AICPA director of tax policy and advocacy. Read more.