Auto Reenroll Act of 2025
The Auto Reenroll Act of 2025 would add a new option to employer-sponsored retirement plans that use automatic enrollment (Qualified Automatic Contribution Arrangements, QACAs, and Eligible Automatic Contribution Arrangements, EACAs). The bill allows for periodic automatic deferrals to be re-applied when an employee’s prior automatic enrollment ends after a period of 1 to 3 years. In such cases, the employee would be treated as having elected to make contributions at the plan’s default uniform percentage unless the employee affirmatively elects otherwise. This reenrollment could be implemented for all affected employees at once for a given plan year. The act also makes conforming changes to ERISA to recognize periodic automatic reenrollment and clarifies that pre-enactment plans are not retroactively affected. The effective date is for plan years beginning after enactment. In short, the bill makes periodic automatic reenrollment permissible (and default-driven) in plans with automatic enrollment, with a built-in 1–3 year window and a safe path for plan sponsors to re-enroll employees unless they opt out or change their elections.
Key Points
- 1Periodic automatic deferral permitted for QACAs and EACAs: If an employee’s prior automatic enrollment ends within a period of 1–3 years, the employee is treated as having elected to contribute at the plan’s uniform default rate unless they affirmatively elect to opt out or change their contribution level.
- 2One-time plan-year termination option: A plan may terminate the reenrollment election described above for all employees in a single plan year.
- 3Coordination with current employee rules and previously disregarded employees: The bill adjusts existing rules to align with periodic reenrollment, and allows previously disregarded employees to be treated as having elected to participate under the new reenrollment framework.
- 4Conforming ERISA changes: The bill adds a parallel automatic contribution provision under ERISA so the automatic contribution arrangements are recognized similarly for qualified plans subject to ERISA.
- 5Effective date and pre-enactment protection: The amendments apply to plan years beginning after enactment, and the bill clarifies that it does not create inferences about pre-enactment plan years or prior rule applications.