Auto Features are taking over

With SECURE 2.0, plan sponsor use of auto features is on the rise

Automatic enrollment and automatic escalation have been prevalent in defined contribution plans (401k, 403b, 457b) for some time. McDonalds is created with getting the ball rolling back in 1984. As new legislation has provided safe harbors to insulate employers from liability, the adoption of these features has taken off (40ish years later). The SECURE Act 2.0 has further turbo charged these plans by making new plans have to use these features.

For grandfathered plans, the question of whether to add auto-enrollment and escalation largely hinges on the type of work force you have. If you choose to adopt these features to an existing plan, you can then decide how to implement them. Do we reenroll the entire plan, do we just make it available to new hires, or do we target under saving employees at the outset? There is a lot that can go into it and working with the right retirement plan advisor can help you achieve your objective.