{"id":783,"date":"2025-01-22T17:33:21","date_gmt":"2025-01-22T17:33:21","guid":{"rendered":"https:\/\/secure.eplanservices401k.com\/blog\/?post_type=article&#038;p=445"},"modified":"2025-09-25T14:37:08","modified_gmt":"2025-09-25T14:37:08","slug":"mandatory-auto-enrollment-what-businesses-need-to-know","status":"publish","type":"article","link":"https:\/\/secure.eplanservices401k.com\/marketing\/article\/mandatory-auto-enrollment-what-businesses-need-to-know\/","title":{"rendered":"Mandatory Auto-Enrollment: What Businesses Need to Know"},"content":{"rendered":"\n\n<p>Currently, it\u2019s optional to automatically enroll your employees in your company\u2019s retirement \nplan\u2014but that\u2019s changing. What was once voluntary will be mandated federally for certain new \nplans beginning in 2025. So that you\u2019re fully informed of your responsibilities as a business \nowner, let\u2019s explore the ins and outs of this new requirement.<\/p>\n<h2>Key Takeaways:<\/h2>\n<ul>\n<li>In 2025, the federal government will mandate auto-enrollment features to be adopted as \npart of certain employer retirement plans.<\/li>\n<li>Eligible employees must be auto-enrolled in certain company-sponsored retirement plans.<\/li>\n<li>Eligible employees who are auto-enrolled can choose not to participate by opting out.<\/li>\n<\/ul>\n<h2>What is auto-enrollment and why is it mandatory?<\/h2>\n<p>Auto-enrollment is a retirement plan feature that automatically signs employees up for their \nemployer\u2019s retirement savings plan, whether that\u2019s a 401(k) or IRA. It exists to help employees \nsave for retirement by participating in an employer-sponsored retirement plan. SECURE Act 2.0 \nmandates that businesses that meet certain criteria must automatically enroll their employees in \ntheir retirement plan, increasing demand for plans with auto-enrollment features.  Businesses \nwith more than 10 employees and have been in business for over three years are required to \ninclude auto-enrollment.<\/p>\n<h2>How does auto-enrollment work in practice?<\/h2>\n<p>Once an employee is enrolled in an ePlan Services retirement plan, a percentage of their \npaycheck is transferred to their 401(k) account. The employee can decide to opt out of \nenrollment at any time. Within 90 days of automatic enrollment, participants who decide to opt \nout are able to withdraw the automatic contributions that were made.<\/p>\n<p>If you, as the employer, fail to set up auto-enrollment, and are deemed to fall under the \nrequirements, we will remind you to amend your plan. For non-safe harbor plans, there are no \nmaximum or minimum deferral rates. A safe harbor plan has two options, a single flat-rate plan \nthat never increases or a plan that auto increases. However, the required minimum initial rate\nof deferral for safe harbor auto-increase plans is 3% and that rate is required to escalate 1% per \nyear to a maximum of 15%.<\/p>\n<h2>Who is excluded from the auto-enrollment mandate?<\/h2>\n<p>If you are an employer whose retirement plan meets the following criteria, your company will \nnot be required to include automatic enrollment.<\/p>\n<ul>\n<li>Your plan was established before December 29, 2022: the date of the bill enactment.<\/li>\n<li>Your business has 10 or fewer employees.<\/li>\n<li>You have a new business that\u2019s been in existence for less than three years.<\/li>\n<li>You\u2019ve adopted a SIMPLE 401(k).<\/li>\n<li>You have a governmental or church plan.<\/li>\n<\/ul>\n<p>*Please note that ePlan Services does not support SIMPLE 401(k), governmental, or church \nplans.<\/p>\n<p>Your plan sponsor can choose to opt out of auto-enrollment by stating that your business does \nnot meet the criteria.<\/p>\n<h2>How does ePlan Services set up auto-enrollment?<\/h2>\n<p>With ePlan Services, your auto-enrollment setup is a breeze. We\u2019ll take care of the process, so \nyou can focus on building your business. Initially, your plan sponsor will receive a task card \nalerting them that it\u2019s time to set up your plan\u2019s auto-enrollment. Your notification will contain \nthe due date for your ePlan Services retirement plan enrollment process. If you\u2019d like to adjust \nyour retirement plan settings any time after your auto-enrollment has been set up, please contact \nour knowledgeable service team to assist with your needs.<\/p>\n<h2>Conclusion:<\/h2>\n<p>The government wants to encourage more employees to participate in employer-sponsored \nretirement plans with the hopes that these employees will be on the right path toward saving for \nretirement. As a result, starting in 2025, auto-enrollment for certain eligible retirement plans will \nbe law. For more information on retirement plan auto-enrollment, visit our <a href=\"https:\/\/secure.eplanservices401k.com\/PROD\/helpcenter\/\">help center<\/a> today!<\/p>\n","protected":false},"featured_media":1308,"template":"","categories":[11,13],"tags":[],"class_list":["post-783","article","type-article","status-publish","has-post-thumbnail","hentry","category-article","category-for-businesses"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mandatory Auto-Enrollment: What Businesses Need to Know - ePlan Services<\/title>\n<meta name=\"description\" content=\"Currently, business owners aren&#039;t required to offer a retirement plan. But it will become mandatory soon. 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