Treasury, IRS issue proposed regulations on new automatic enrollment requirement for 401(k) and 403(b) plans

IR-2025-09, Jan. 10, 2025

WASHINGTON - The Department of the Treasury and the Internal Revenue Service today issued proposed regulations addressing certain SECURE 2.0 Act provisions, including a provision generally requiring newly-established 401(k) and 403(b) plans to automatically enroll eligible employees beginning with the 2025 plan year.

In general, unless an employee opts out, a plan must automatically enroll the employee at an initial contribution rate of at least 3% of the employee's pay and automatically increase the initial contribution rate by one percentage point each year until it reaches at least 10% of pay. This requirement generally applies to 401(k) and 403(b) plans established after Dec. 29, 2022, the date the SECURE 2.0 Act became law, with exceptions for new and small businesses, church plans, and governmental plans.

The proposed regulations provide guidance to plan administrators for properly implementing this requirement and are proposed to apply to plan years that begin more than 6 months after the date that final regulations are issued. Before the final regulations are applicable, plan administrators must apply a reasonable, good faith interpretation of the statute.

Treasury and IRS welcome comments on these proposed regulations. Comments may be submitted through the Federal Register. See the proposed regulations for details.