Geoff came into my office looking concerned. “David, I heard something about mandatory automatic enrollment for retirement plans starting in 2025. Is that true?”
“Hi, Geoff. And yes, you’re right. Starting in 2025, most new 401(k) or 403(b) plans will be required to have an automatic enrollment feature. Unless employees opt out, they’ll automatically start contributing—usually 5% of their paycheck.”
“So, if I set up a new plan in 2025, I have to do this auto-enrollment thing?”
“Yes, and this requirement isn’t just for new plans. If your plan was started in 2023 or 2024, you might still need to add automatic enrollment in 2025.”
Geoff shook his head. “Are there any exceptions?”
“Fortunately, yes. Plans established before December 29, 2022, are exempt, along with small businesses that have ten employees or fewer. New companies under three years old are also off the hook—for a while—but once they hit the three-year mark, they’ll still need to add auto-enrollment.”
“That sounds manageable … until it isn’t,” Geoff sighed. “What happens if I miss the deadline?”
“Not advisable. A missed deadline could lead to make-up contributions for employees, and earnings adjustments—and, of course, administrative headaches.”
“Sounds like a nightmare if it’s not done right!”
“It’s not so bad,” I countered. “Crossing the street can be a nightmare of it’s not done right, but we’re here having this conversation. Why not let me and my team handle the details? With our 3(16) administrative services, we’ll take care of the setup and administration. And if anything slips through the cracks—which it won’t—it’ll be on us to fix it.”
“That’s a relief,” said Geoff. “Auto-enrollment sounds like a recipe for compliance hassles.”
“And that’s what Concierge is here for. You focus on the things you’re an expert in; we keep your plan running smoothly in the background. That’s what we’re experts in!”
Why navigate the rocky waters of retirement planning without a compass? Ask the experts at Concierge Retirement Services to create a custom plan that suits your unique needs and circumstances.