Secure 2.0 and ACA Question

[Gadgetfreak]

A PS-only plan established in the 1990s wants to add a 401k provision in 2024. They have more than 10 EEs. Must they implement an Automatic Contribution Arrangement?

 

Everything online seems to indicate "no". But the IRS grab bag notice says the qualified CODA had to have been established before 12/29/22. I also tried searching here but couldn't find the answer. Thanks in advance.

[Paul I]

Notice 2024-2 has this new term "pre-enactment qualified CODA".  I don't see how a PS-only plan that does not yet have a qualified CODA could be considered a pre-enactment qualified CODA.

Here is the Q&A from Notice 2024-2:

Q. A-1: When is a qualified CODA established for purposes of determining
whether the qualified CODA is excepted under section 414A(c)(2)(A)(i) of the Code from
the requirements related to automatic enrollment (that is, whether the qualified CODA is
a pre-enactment qualified CODA)?
A. A-1: For purposes of section 414A(c)(2)(A)(i), a qualified CODA is established
on the date plan terms providing for the CODA are adopted initially. This is the case
even if the plan terms providing for the CODA are effective after the adoption date. For
example, if an employer adopted a plan that included a qualified CODA on October 3,
2022, with an effective date of January 1, 2023, then the qualified CODA would have
been established on October 3, 2022 (that is, before December 29, 2022), even though
the qualified CODA was not effective until after December 29, 2022.
 

[Gadgetfreak]

Exactly what I suspected. Maybe all of these outside published articles were written before 2024-2. But it seems you agree that this Plan will now need an ACA. Anyone else want to chime in? Thanks.

[CuseFan]

seconded

[EMoney]

In the ERISApedia Grab Bag webinar, the presenters specifically said that adding deferrals to a profit sharing plan was not a grandfathered plan so auto enrollment required.