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SECURE Act 2.0 Will Make Retirement Savings Automatic - How Employers Can Prepare

Posted December 16, 2022 by CHC Wellbeing. Filed under FINANCIAL WELLBEING, EMPLOYEE BENEFITS
Gen Z Retirement

Employee Benefit News

There have been many questions circulating about how we can help the younger generations entering the workforce with their savings for retirement. The SECURE Act 2.0 may be the answer to some of those questions. Expanding on 2019's SECURE Act, this version would automatically enroll new employees into a 401(k) or 403(b) plan when starting with a company, among other initiatives. Furthermore, employees would start by investing 3% of their pay and increasing it by 1% every year until they reach 10% contribution. While there are some skeptics, a study provided by Vanguard showed that 92% of employees continued to save in their 401(k) plans three years after being enrolled. When it comes to voluntary participation, this number drops to a staggering 29%. Although the passing of this legislation would be a lift on employers, it is a beneficial offering to employees. Will the SECURE Act 2.0 pass? If so, how will this shape other benefit offerings? 

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