Auto Enrollment Required?

[Barbara]

I have a cross-tested profit sharing plan where the client is considering adding a Safe Harbor 401(k) feature for 2024.  Will auto enrollment features be required?

[CuseFan]

that is my understanding

[Peter Gulia]

Although Internal Revenue Code § 414A(a)(1) generally (with some exceptions) applies to a § 401(k) arrangement established on or after December 29, 2022, a plan need not provide an automatic-contribution arrangement until the first plan year that begins on or after January 1, 2025.

Some plan sponsors might consider it awkward to omit an automatic-contribution arrangement for 2024, recognizing a need to add automatic for 2025.

But others might prefer administering the first year of a new § 401(k) arrangement without the extra complexity of automatic.

[Barbara]

Thanks for the quick responses!