What Is the New Auto-Enrollment Law From Secure 2.0? 

Key Dates and What It Means for Your 401(k)

Starting in 2025, most new 401(k) and 403(b) plans will automatically sign up employees to save for retirement – unless participants actively choose to opt out. This new rule comes from the SECURE 2.0 Act and is designed to help more people start building their nest egg without extra steps.

FAQs

Question	Answer
Which plans must auto-enroll?	New 401(k)/403(b) plans set up on or after Dec 29, 2022
When does it start?	Plan years beginning Jan 1, 2025 (for calendar-year plans)
Default contribution rate	3%–10%, rising 1% per year until at least 10% (up to 15% max after 2025)
Can employees opt out?	Yes, at any time
Who’s exempt?	Small employers, new businesses, older plans, church/government plans

What Is the Secure 2.0 Auto-Enrollment Law?

The SECURE 2.0 Act, passed in December 2022, requires most new workplace retirement plans to automatically enroll eligible employees.

If your employer starts a qualifying plan after December 29, 2022, you’ll be added automatically unless you opt out.

Why Auto-Enrollment?

Automatic enrollment makes saving the default choice – so even if you forget to sign up, you’ll still start building retirement savings right away. Studies show it boosts participation and helps employees grow larger retirement balances over time.

When Does This Take Effect?

• Applies to new plans started on or after December 29, 2022
• Automatic enrollment must begin no later than January 1, 2025 (for calendar-year plans)
• Existing plans from before Dec 29, 2022 don’t have to add auto-enrollment
• Some employers are exempt (see below)

Key Requirements for New Auto-Enrollment Plans

• Automatic sign-up for eligible employees as soon as they qualify
• Default savings rate: Between 3% and 10% of your pay
• Automatic annual increase: At least 1% per year until reaching at least 10% (up to 15% max after 2025)
• Opt-out option: You can stop or change contributions anytime
• Notice required: Employers must explain your contribution rate, rights, and how to opt out
• 90-day withdrawal window: You can take out your initial contributions and earnings within 90 days if you choose

Who Is Exempt?

• Employers with 10 or fewer employees
• Plans started before December 29, 2022
• Businesses less than 3 years old
• Church and government plans

How The Secure 2.0 Auto Enroll Law Might Affect You

If your company launches a new 401(k) or 403(b) after Dec 29, 2022:

• You’ll likely be enrolled automatically
• A portion of your paycheck will go straight into your retirement account
• Your savings rate will increase automatically each year unless you change it
• You can opt out or adjust your rate at any time

Tips

• Watch for enrollment notices if your company launches a new plan
• Review your default contribution rate — increasing it early can boost your savings
• Don’t ignore the auto-increase — it can be a powerful tool for building wealth
• Ask your employer for details about your plan’s start date and rules

Auto-enrollment takes the guesswork out of getting started – but reviewing your 401k regularly keeps you in control of your financial future.