Auto-Enrollment Mandate

Definition

A SECURE 2.0 requirement that newly established 401(k) and 403(b) plans automatically enroll eligible employees at a default contribution rate of at least 3%, increasing by 1% annually up to a maximum of 10–15%. Employees retain the right to opt out or adjust their contribution rate. This provision creates a compliance obligation for small business clients who establish new plans, requiring CPA advisors to confirm plan documents and payroll configurations meet the mandate.