The SECURE Act, which stands for “Setting Every Community Up for Retirement Enhancement” Act, was signed into law at the end of 2019. The Act takes small but impactful steps towards addressing the country’s retirement crisis by incentivizing small business owners to sponsor retirement plans for their employees.

Our four-part series will cover four significant upgrades made by the Act that you should consider.

Significant Upgrade #2: Incentives for automatic enrollment
Automatic enrollment is a great way to increase participation by encouraging employees to start—and continue—saving. Knowing this, lawmakers are trying to encourage employers in that direction. An employee’s auto-enrolment contribution rate for certain plans used to be capped at 10% but has now increased to 15% after an employee’s first year.

By waiting until the employee’s second year for the increase, the SECURE Act is expected to reduce the number of individuals who drop out of plans due to high initial contribution amounts. The legislation also introduced a new tax credit (up to $500 a year for three years) for employers who launch new 401k and SIMPLE IRA plans with automatic enrollment. 

We Are Here to Help
You have worked hard to build a prosperous business for you and your employees. We are here to help develop a plan to ensure that your business thrives and takes advantage of the new aspects of the SECURE Act. At Marvel Law, we are here to help serve you with purpose.  Click here to email us or call us at 309-807-2885 for your FREE 15-minute consultation.