Plan Design Ideas for 2024

While everyone is already tired of talking about SECURE Act 2.0, what about some of those tax credits that you could get from the original SECURE Act? Many plan sponsors with fewer than 100 employees weren't originally swayed to add automatic enrollment and automatic escalation after the original SECURE Act. While the tax credit offered was nice, they were in touch with their employees each enrollment period and thought that they didn't have a need to opt employees into the plan.

With SECURE 2.0, starting in 2025 all new plans will have to have automatic enrollment and automatic escalation. It may take some time, but at a certain point employees are just going to expect to be automatically enrolled in their employer's plan. This has been the additional push that many plan sponsors have needed to add this provision, whether it changes participation in their plan or not. As an added bonus, those employer's who add this automatic enrollment and escalation feature will get a $500 tax credit per year for the first three years they offer the feature. The key is that the plan have under 100 employees, be an EACA (eligible automatic contribution arrangement), the plan must keep the feature for three years and the plan must cover at least one non-highly compensated employee.