3092 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Proposed Rules 

1Under § 1.401(k)–1(a)(2)(i), a CODA generally is 

an arrangement providing for an election by an 

employee to have the employer provide either 

contributions to a plan described in section 401(a) 

or payments directly in cash. 

taxpayers may apply these regulations 

in their entirety for taxable years 

beginning after December 31, 2017, and 

ending before December 17, 2018. In 

lieu of applying the regulations referred 

to in the first sentence of this paragraph 

(a), taxpayers may apply the provisions 

matching §§ 1.59A–1 through 1.59A–9 

from the Internal Revenue Bulletin (IRB) 

2019–02 (https://www.irs.gov/irb/2019- 

02_IRB) in their entirety for all taxable 

years beginning after December 31, 

2017, and ending on or before December 

6, 2019. 

* * * * * 

(c) Additional applicability dates. 

Sections 1.59A–3(b)(2)(iv) and 1.59A– 

6(b)(3) (iii) through (iv) apply to taxable 

years beginning on or after January 10, 

2025. 

■ Par. 6. Section 1.6038A–2 is amended 

by revising the third sentence of 

paragraph (g) to read as follows: 

§ 1.6038A–2 Requirement of return. 

* * * * * 

(g) * * * Paragraph (b)(7)(ix) of this 

section applies to payments made in 

taxable years beginning on or after 

January 1, 2027. * * * 

Douglas W. O’Donnell, 

Deputy Commissioner. 

[FR Doc. 2025–00186 Filed 1–10–25; 4:15 pm] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–100669–24] 

RIN 1545–BR08 

Automatic Enrollment Requirements 

Under Section 414A 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice of proposed rulemaking 

and notice of public hearing. 

SUMMARY: This document sets forth 

proposed regulations that would 

provide guidance with respect to the 

automatic enrollment requirements that 

apply to certain retirement plans. The 

proposed regulations reflect statutory 

changes made by the SECURE 2.0 Act of 

2022 requiring that certain cash or 

deferred arrangements and salary 

reduction agreements be eligible 

automatic contribution arrangements 

that satisfy additional specified 

requirements. The proposed regulations 

would affect participants in, 

beneficiaries of, employers maintaining, 

and administrators of certain retirement 

plans that include cash or deferred 

arrangements or annuity contracts 

purchased under salary reduction 

agreements and other retirement plans 

that include eligible automatic 

contribution arrangements. This 

document also provides notice of a 

public hearing. 

DATES: Written or electronic comments 

must be received by March 17, 2025. A 

public hearing on this proposed 

regulation has been scheduled for April 

8, 2025, at 10 a.m. ET. Requests to speak 

and outlines of topics to be discussed at 

the public hearing must be received by 

March 17, 2025. If no outlines are 

received by March 17, 2025, the public 

hearing will be cancelled. 

ADDRESSES: Commenters are strongly 

encouraged to submit public comments 

electronically. Submit electronic 

submissions via the Federal 

eRulemaking Portal at 

www.regulations.gov (indicate IRS and 

REG–100669–24) by following the 

online instructions for submitting 

comments. Requests for a public hearing 

must be submitted as prescribed in the 

‘‘Comments and Public Hearing’’ 

section. Once submitted to the Federal 

eRulemaking Portal, comments cannot 

be edited or withdrawn. The 

Department of the Treasury (Treasury 

Department) and the IRS will publish 

for public availability any comment 

submitted electronically or on paper to 

its public docket on 

www.regulations.gov. Send paper 

submissions to: CC:PA:01:PR (REG– 

100669–24), Room 5203, Internal 

Revenue Service, P.O. Box 7604, Ben 

Franklin Station, Washington, DC 

20044. 

FOR FURTHER INFORMATION CONTACT: 

Concerning the proposed regulations, 

call Christina M. Cerasale at (202) 317– 

4102 or Kara M. Soderstrom at (202) 

317–6799; concerning submission of 

comments, the hearing, and the access 

code to attend the hearing by telephone, 

call the Publications and Regulations 

Section at (202) 317–6901 (not toll-free 

numbers) or email publichearings@

irs.gov (preferred). 

SUPPLEMENTARY INFORMATION: 

Authority 

These proposed regulations are 

promulgated under section 7805(a) of 

the Internal Revenue Code (Code), 

which provides that ‘‘the Secretary shall 

prescribe all needful rules and 

regulations for the enforcement of [the 

Code], including all rules and 

regulations as may be necessary by 

reason of any alteration of law in 

relation to internal revenue.’’ In 

addition, section 341 of the SECURE 2.0 

Act of 2022 (SECURE 2.0 Act), enacted 

on December 29, 2022, as Division T of 

the Consolidated Appropriations Act, 

2023, Public Law 117–328, 136 Stat. 

4459 (2022), instructs the Secretaries of 

the Treasury and Labor (or their 

delegates) to adopt regulations related to 

the consolidation of notices required for 

defined contribution plans under the 

Code and the Employee Retirement 

Income Security Act of 1974, Public 

Law 93–406, 88 Stat. 829, as amended 

(ERISA). 

Background 

This notice of proposed rulemaking 

sets forth a proposed regulation under 

section 414A of the Code that would be 

added to the Income Tax Regulations 

(26 CFR part 1). Section 414A, which 

was added to the Code by section 101 

of the SECURE 2.0 Act, provides that 

certain retirement plans must 

automatically enroll employees. 

In addition to adding a new regulation 

under section 414A of the Code, this 

notice of proposed rulemaking sets forth 

proposed amendments to the 

regulations under section 414(w). These 

amendments to § 1.414(w)–1 would 

reflect the application of section 414A 

and the exception to the notice 

requirements for unenrolled 

participants set forth in section 414(bb), 

as added to the Code by section 320 of 

the SECURE 2.0 Act. The proposed 

amendments to § 1.414(w)–1 also would 

address section 402A(e)(5)(C) of the 

Code, which was added to the Code by 

section 127 of the SECURE 2.0 Act, as 

well as section 341 of the SECURE 2.0 

Act. Section 402A(e)(5)(C) of the Code 

and section 341 of the SECURE 2.0 Act 

permit the consolidation of certain 

notices required under the Code and 

ERISA. 

I. In General 

A. Cash or Deferred Arrangements and 

Salary Reduction Agreements 

Section 401(k)(1) provides that a 

profit-sharing, stock bonus, pre-ERISA 

money purchase, or rural cooperative 

plan will not fail to qualify under 

section 401(a) merely because it 

includes a cash or deferred arrangement 

(CODA) 1 that is a qualified CODA. 

Under section 401(k)(2), a CODA is a 

qualified CODA only if it satisfies 

certain requirements. These 

requirements include that elective 

contributions under the CODA are 

subject to the section 401(k)(2)(B) 


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2The ADP test in section 401(k)(3)(A)(ii) 

compares the average deferral percentage for highly 

compensated employees with the average deferral 

percentage for non-highly compensated employees. 

As an alternative to satisfying the annual ADP test, 

a plan may satisfy the provisions of section 

401(k)(11), (12), (13), or (16). 

3Section 902 of PPA ’06 also added a new section 

514(e) to ERISA, which broadly provides that, 

notwithstanding any other provision of section 514, 

title I of ERISA supersedes State laws that would 

directly or indirectly prohibit or restrict the 

inclusion of an automatic contribution arrangement 

in a plan. 

4Section 414(w)(5) defines an applicable 

employer plan for purposes of section 414(w) as a 

trust described in section 401(a) that is exempt from 

tax under section 501(a), a plan described in section 

403(b), a section 457(b) plan that is maintained by 

a governmental employer described in section 

457(e)(1)(A), a simplified employee pension the 

terms of which provide for a salary reduction 

arrangement described in section 408(k)(6), or a 

SIMPLE individual retirement account described in 

section 408(p). 

restriction on when distributions may 

be made, and that the arrangement 

satisfies the actual deferral percentage 

(ADP) test in section 401(k)(3)(A)(ii).2

Section 403(b)(1) of the Code provides 

for an exclusion from gross income of 

certain contributions that are used to 

purchase an annuity contract, including 

contributions that are made under a 

salary reduction agreement. Although 

there is no direct definition of salary 

reduction agreement in section 403(b), 

several provisions of the Code set forth 

rules that apply to the use of a salary 

reduction agreement to purchase an 

annuity contract described in section 

403(b). For example, section 403(b)(11) 

provides distribution restrictions that 

apply to ‘‘contributions made pursuant 

to a salary reduction agreement.’’ 

B. Automatic Enrollment 

Section 902 of the Pension Protection 

Act of 2006, Public Law 109–280, 120 

Stat. 780 (PPA ‘06), added sections 

401(k)(13) and 414(w) to the Code to 

facilitate automatic contribution 

arrangements (also referred to as 

automatic enrollment) in qualified 

CODAs under section 401(k). Section 

414(w) also applies to automatic 

contribution arrangements under 

section 403(b) plans; section 457(b) 

plans maintained by governmental 

employers described in section 

457(e)(1)(A); simplified employee 

pensions, the terms of which provide for 

a salary reduction arrangement 

described in section 408(k)(6); and 

SIMPLE individual retirement accounts 

described in section 408(p). An 

automatic contribution arrangement is a 

CODA or other similar arrangement 

providing for elections on the part of 

eligible employees that includes a 

default election under which an eligible 

employee is treated as having elected to 

have a specified contribution made on 

the employee’s behalf under the plan 

while permitting the employee to make 

an affirmative election to have 

contributions made in a different 

amount on the employee’s behalf 

(including no contributions).3

1. Qualified Automatic Contribution 

Arrangements Under Section 401(k)(13) 

Section 401(k)(13) provides a designbased safe harbor for a CODA that 

provides for automatic enrollment at a 

specified level and meets certain 

employer contribution, notice, and other 

requirements. A CODA that satisfies 

these requirements, referred to as a 

qualified automatic contribution 

arrangement (QACA), is treated as 

satisfying the ADP test. 

Section 401(k)(13)(C)(ii) provides that 

the default election in a QACA ceases to 

apply to any eligible employee if the 

employee makes an affirmative election 

to not have any elective contributions 

made on the employee’s behalf or to 

have elective contributions made in a 

specified amount or percentage of 

compensation on the employee’s behalf. 

Reflecting that provision, § 1.401(k)– 

3(j)(1)(ii) provides that the default 

election ceases to apply with respect to 

an eligible employee for periods of time 

with respect to which the employee has 

an affirmative election that is currently 

in effect to have elective contributions 

made in a different amount on the 

employee’s behalf (in a specified 

amount or percentage of compensation) 

or not have any elective contributions 

made on the employee’s behalf. 

Section 401(k)(13)(C)(iii) sets forth a 

series of minimum default contribution 

percentages (based on the plan year that 

the arrangement first applies to an 

employee) that an automatic 

contribution arrangement must satisfy to 

be a QACA and requires that the default 

contribution percentages apply 

uniformly. Under § 1.401(k)–3(j)(2)(iii), 

a plan does not fail to satisfy this 

uniform percentage requirement merely 

because: (1) the percentage varies based 

on the number of years or portions of 

years an eligible employee has 

participated in the automatic 

contribution arrangement intended to be 

a QACA; (2) the rate of elective 

contributions under a cash or deferred 

election that is in effect immediately 

prior to the effective date of the default 

percentage under the QACA is not 

reduced; (3) the rate of elective 

contributions is limited so as not to 

exceed the limits of sections 401(a)(17), 

402(g) (determined with or without 

catch-up contributions), and 415; or (4) 

the default election is not applied 

during the period an employee is not 

permitted to make elective contributions 

pursuant to section 414(u)(12)(B)(ii). 

Section 401(k)(13)(C)(iv) provides an 

exception from the application of the 

default election under a QACA for 

eligible employees who were eligible to 

participate in the CODA (or a 

predecessor CODA) immediately before 

the effective date of the QACA and who 

have an election in effect on that 

effective date. Reflecting that provision, 

§ 1.401(k)–3(j)(1)(iii) provides that an 

automatic contribution arrangement 

does not fail to be a QACA merely 

because the default election is not 

applied to an employee who was 

eligible under the CODA (or a 

predecessor arrangement) immediately 

prior to the effective date of the QACA 

and on that effective date had an 

affirmative election in effect (that 

remains in effect) to have elective 

contributions made on the employee’s 

behalf (in a specified amount or 

percentage of compensation) or not have 

elective contributions made on the 

employee’s behalf. 

Section 1.401(k)–3(j)(2)(iv) provides 

that minimum percentages in a QACA 

are determined without regard to 

whether an employee has continued to 

be eligible to make contributions under 

the plan. However, § 1.401(k)–3(j)(2)(iv) 

provides that a plan is permitted to treat 

an employee who for an entire plan year 

did not have contributions made 

pursuant to a default election under a 

QACA as if the employee also had not 

had such contributions for any prior 

plan year. 

2. Eligible Automatic Contribution 

Arrangements Under Section 414(w) 

Section 414(w) facilitates automatic 

enrollment by providing relief from the 

distribution restrictions under section 

401(k)(2)(B), 403(b)(7), 403(b)(11), or 

457(d)(1)(A) in the case of an eligible 

automatic contribution arrangement 

(EACA). Under this relief, a plan may 

permit an employee who was 

automatically enrolled under an EACA 

to take a distribution within a limited 

period after the initial default elective 

contribution with respect to the 

employee was made. 

Under section 414(w)(1) and (2), an 

applicable employer plan 4 that contains 

an EACA is permitted to allow 

employees to elect to receive a 

distribution, called a permissive 

withdrawal, equal to the amount of 

default elective contributions (and 

attributable earnings) made with respect 

to the employee beginning with the first 

payroll period to which the EACA 


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3094 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Proposed Rules 

5Section 414(w)(1)(A) and (B) provides that the 

amount of the distribution is includible in the gross 

income of the employee for the taxable year in 

which the distribution is made but is not subject to 

the additional income tax on early distributions 

under section 72(t). 

6Section 414A(b)(3)(B) provides a reduced 

maximum default contribution percentage of 10 

percent for certain plans with respect to certain 

plan years. 

7The requirements of 29 CFR 2550.404c–5 relate 

to investments in qualified default investment 

alternatives. 

applies to the employee and ending 

with the effective date of the election. 

The election must be made within 90 

days after the date of the first default 

elective contribution with respect to the 

employee under the arrangement.5

Section 414(w)(3) defines an EACA as 

an arrangement under which: (1) a 

participant may elect to have the 

employer make payments as 

contributions under the plan on behalf 

of the participant, or to the participant 

directly in cash; (2) the participant is 

treated as having elected to have the 

employer make such contributions in an 

amount equal to a uniform percentage of 

compensation provided under the plan 

until the participant specifically elects 

not to have such contributions made (or 

specifically elects to have such 

contributions made at a different 

percentage); and (3) participants are 

provided a notice that satisfies the 

requirements of section 414(w)(4). 

Section 414(w)(4) provides that the 

administrator of a plan that includes an 

EACA must, within a reasonable period 

before each plan year, provide each 

employee to whom the arrangement 

applies for the plan year written notice 

of the employee’s rights and obligations 

under the arrangement that is 

sufficiently accurate and comprehensive 

to apprise the employee of the 

employee’s rights and obligations. 

Section 414(w)(4)(A)(ii) requires that the 

notice be written in a manner calculated 

to be understood by the average 

employee to whom the arrangement 

applies. Section 414(w)(4)(B) provides 

that the notice must explain: (1) the 

employee’s rights under the 

arrangement to elect not to have elective 

contributions made on the employee’s 

behalf (or to elect to have contributions 

made at a different percentage), and (2) 

how contributions made under the 

arrangement will be invested in the 

absence of any investment decision by 

the employee. In addition, the employee 

must be given a reasonable period of 

time after receipt of the notice and 

before the first elective contribution is 

made to make an election described in 

the notice. 

The Treasury Department and the IRS 

issued a regulation under section 414(w) 

on February 24, 2009 (TD 9447, 74 FR 

8200). Section 1.414(w)–1(b)(2) includes 

rules that address the uniform 

percentage requirement of section 

414(w)(3)(B), including rules that 

incorporate the exceptions to the 

uniform percentage requirement for a 

default elective contribution for a QACA 

set forth in § 1.401(k)–3(j)(2)(iii). 

II. New Automatic Enrollment 

Requirements and Other Changes 

Regarding EACAs Under the SECURE 

2.0 Act 

A. Section 101 of the SECURE 2.0 Act 

Section 101 of the SECURE 2.0 Act 

adds section 414A to the Code. Under 

section 101(c) of the SECURE 2.0 Act, 

the amendments made by section 101 

apply to plan years beginning after 

December 31, 2024. 

Section 414A(a)(1) of the Code 

generally provides that a CODA will not 

be treated as a qualified CODA 

described in section 401(k) unless the 

CODA satisfies the automatic 

enrollment requirements of section 

414A(b). Similarly, section 414A(a)(2) 

generally provides that an annuity 

contract otherwise described in section 

403(b) that is purchased under a salary 

reduction agreement will not be treated 

as described in section 403(b) unless the 

salary reduction agreement satisfies the 

automatic enrollment requirements of 

section 414A(b). 

Under section 414A(b)(1), a CODA or 

salary reduction agreement satisfies the 

automatic enrollment requirements of 

section 414A(b) if the CODA or salary 

reduction agreement is an EACA (as 

defined in section 414(w)(3)) that 

satisfies the additional requirements of 

section 414A(b)(2) through (4). Section 

414A(b)(2) requires the EACA to allow 

employees to make permissible 

withdrawals (as defined in section 

414(w)(2)). Under section 

414A(b)(3)(A)(i), the minimum initial 

default contribution percentage under 

the EACA must be at least 3 percent (but 

not more than 10 percent), and under 

section 414A(b)(3)(A)(ii), the default 

contribution percentage must increase 

by one percentage point for each plan 

year beginning after each completed 

year of participation under the EACA, 

up to a maximum default contribution 

percentage of at least 10 percent (but not 

more than 15 percent).6 Section 

414A(b)(4) provides that amounts 

contributed pursuant to the EACA for 

which no investment is elected by a 

participant must be invested in 

accordance with the requirements of 29 

CFR 2550.404c–5 7 (or any successor 

regulations). 

Section 414A(c) sets forth certain 

exceptions to the requirements of 

section 414A(a). In general, section 

414A(a) does not apply to any: (1) 

SIMPLE 401(k) plan described in 

section 401(k)(11); (2) qualified CODA 

established before December 29, 2022 

(the date of enactment of the SECURE 

2.0 Act); (3) section 403(b) plan 

established before December 29, 2022; 

(4) governmental plan described in 

section 414(d); (5) church plan 

described in section 414(e); (6) plan 

maintained by a new business as 

described in section 414A(c)(4)(A); or 

(7) plan maintained by a small business 

as described in section 414A(c)(4)(B). 

Certain of the exceptions in section 

414A(c) include special rules for plans 

maintained by more than one employer. 

Section 414A(c)(2)(B) provides rules 

that apply in the case of an employer 

that, after December 29, 2022, adopts a 

plan maintained by more than one 

employer. Under that provision, the 

exception to section 414A(a) for a 

qualified CODA or 403(b) plan 

established before December 29, 2022, 

will not apply to that adopting 

employer, and the rules of section 

414A(a) will apply with respect to that 

employer as if the plan were a single 

plan. In addition, under section 

414A(c)(4)(C), the new business and 

small business exceptions to section 

414A(a) are applied separately to each 

participating employer in a plan 

maintained by more than one employer, 

and all participating employers to 

which section 414A(a) applies (after the 

application of the new business 

exception in section 414A(c)(4)(A) and 

the small business exception in section 

414A(c)(4)(B)) are treated as maintaining 

a separate plan for purposes of section 

414A. 

On December 20, 2023, the Treasury 

Department and the IRS released Notice 

2024–2, 2024–2 IRB 316, which 

provides initial guidance on certain 

provisions of the SECURE 2.0 Act. 

Section II.A of Notice 2024–2 provides 

initial guidance in the form of questions 

and answers regarding certain issues 

related to section 414A of the Code that 

primarily addresses the scope of the 

exceptions under section 414A(c)(2) to 

the requirements of section 414A. 

Q&A A–1 of Notice 2024–2 provides 

that, for purposes of section 

414A(c)(2)(A)(i) (the exception to 

section 414A(a) for a qualified CODA 

established before December 29, 2022), 

a qualified CODA is established on the 

date plan terms providing for the CODA 

are adopted initially, even if the plan 

terms providing for the CODA are 

effective after the adoption date. 


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8On January 12, 2024, the Treasury Department 

and the IRS released Notice 2024–22, 2024–6 IRB 

662, which provides initial guidance regarding antiabuse rules under section 402A(e)(12) of the Code, 

as added by section 127 of the SECURE 2.0 Act, and 

also addresses whether Rev. Rul. 74–55, 1974–1 CB 

89, and Rev. Rul. 74–56, 1974–1 CB 90, are 

applicable to PLESAs. 

Q&A A–2 of Notice 2024–2 provides 

rules that apply in the case of a merger 

of a plan maintained by a single 

employer that includes a qualified 

CODA established before December 29, 

2022 (a pre-enactment qualified CODA), 

with another plan that includes a preenactment qualified CODA. Under Q&A 

A–2, the treatment of the qualified 

CODA included in the ongoing plan as 

a pre-enactment qualified CODA is 

unaffected by the merger (without 

regard to whether the ongoing plan is 

maintained by a single employer or 

more than one employer). 

Q&A A–3 of Notice 2024–2 provides 

that if a plan that includes a qualified 

CODA that was not established before 

December 29, 2022, is merged with a 

plan that includes a pre-enactment 

qualified CODA, then, after the merger, 

the qualified CODA included in the 

ongoing plan generally will not be 

treated as a pre-enactment qualified 

CODA. However, if, in connection with 

a disposition, acquisition, or other 

transaction described in section 

410(b)(6)(C), a plan maintained by a 

single employer that includes a 

qualified CODA that was not established 

before December 29, 2022, is merged 

with another plan maintained by a 

single employer that includes a preenactment qualified CODA, and the 

plan that includes the pre-enactment 

qualified CODA is designated as the 

ongoing plan, then the qualified CODA 

included in the ongoing plan continues 

to be treated as a pre-enactment 

qualified CODA after the merger, 

provided that the merger occurs by the 

end of the section 410(b)(6)(C) transition 

period. 

Q&A A–3 also provides that if a plan 

maintained by a single employer 

includes a qualified CODA that was not 

established before December 29, 2022, 

and is merged into a plan maintained by 

more than one employer that includes a 

pre-enactment qualified CODA, then the 

qualified CODA included in the ongoing 

plan would not be treated as a preenactment qualified CODA with respect 

to that employer. However, in that case, 

the merger would not affect whether the 

qualified CODA is treated as a preenactment qualified CODA with respect 

to other employers that participate in 

the ongoing plan. 

Q&A A–4 of Notice 2024–2 provides 

that if a plan that includes a qualified 

CODA is spun off from a plan that 

includes a pre-enactment qualified 

CODA, the qualified CODA included in 

the new spun-off plan generally is also 

treated as being a pre-enactment 

qualified CODA. However, if the plan 

from which the new plan was spun off 

was a plan maintained by more than one 

employer that was established before 

December 29, 2022, then the qualified 

CODA included in the spun-off plan is 

treated as a pre-enactment qualified 

CODA only if the qualified CODA in the 

plan maintained by more than one 

employer was treated as a preenactment qualified CODA with respect 

to the employer sponsoring the spun-off 

plan. 

Q&A A–5 of Notice 2024–2 provides 

that, in general, the rules of section 

414A that apply to qualified CODAs 

also apply to section 403(b) plans. 

However, the exception to section 

414A(a) for a section 403(b) plan 

established before December 29, 2022, 

applies without regard to the date of 

adoption of plan terms that provide for 

salary reduction agreements. 

Q&A A–6 of Notice 2024–2 explains 

that, unless an exception set forth in 

section 414A(c) applies (for example, 

the exception for a new or small 

business), section 414A(a) applies to a 

starter 401(k) deferral-only arrangement 

described in section 401(k)(16)(B), or to 

a safe harbor deferral-only plan 

described in section 403(b)(16)(B), for 

plan years beginning after December 31, 

2024. 

The Treasury Department and the IRS 

received 12 written comments in 

response to Notice 2024–2 that address 

the guidance provided in Section II.A of 

the notice. The Treasury Department 

and the IRS reviewed all 12 comments, 

and this preamble addresses those that 

are relevant and within scope for this 

notice of proposed rulemaking. All 

written comments responding to Notice 

2024–2 are available for public 

inspection and copying at 

www.regulations.gov, and certain of 

those comments that address Section 

II.A of Notice 2024–2 are discussed in 

the Explanation of Provisions portion of 

this preamble. 

B. SECURE 2.0 Act Changes Regarding 

EACA Notices 

1. Notice Requirements for Unenrolled 

Participants 

Section 320(b) of the SECURE 2.0 Act 

adds section 414(bb) to the Code, 

effective for plan years beginning after 

December 31, 2022. Section 414(bb)(1) 

provides that, with respect to any 

defined contribution plan, no 

disclosure, notice, or other plan 

document is required to be furnished 

under the Code to any unenrolled 

participant if the unenrolled participant 

is furnished: (1) an annual reminder 

notice (as defined in section 414(bb)(3)) 

of the participant’s eligibility to 

participate in the plan and any 

applicable election deadlines under the 

plan, and (2) any document requested 

by the participant that the participant 

would be entitled to receive 

notwithstanding section 414(bb). 

Section 414(bb)(2) defines an 

unenrolled participant as an employee 

who: (1) is eligible to participate in a 

defined contribution plan, (2) has been 

furnished the summary plan description 

pursuant to section 104(b) of ERISA for 

the plan and any other notices related 

to eligibility under the plan and 

required to be furnished under the Code 

or ERISA in connection with the 

participant’s initial eligibility to 

participate in the plan, (3) is not 

participating in the defined contribution 

plan, and (4) satisfies any other criteria 

as the Secretary of the Treasury may 

determine appropriate, as prescribed in 

guidance issued in consultation with 

the Secretary of Labor. The last sentence 

of section 414(bb)(2) of the Code 

provides that any eligibility to 

participate in the plan following any 

period for which the employee was not 

eligible to participate is to be treated as 

initial eligibility. 

Section 414(bb)(3) provides that the 

annual reminder notice required under 

section 414(bb)(1) is the notice 

described in section 111(c) of ERISA (as 

added by section 320(a) of the SECURE 

2.0 Act). 

2. Combining EACA Notices With Other 

Notices 

Section 127 of the SECURE 2.0 Act 

provides for the creation of pensionlinked emergency savings accounts 

(PLESAs) effective for plan years 

beginning after December 31, 2023. 

Among other changes, section 127 of the 

SECURE 2.0 Act redesignates section 

402A(e) of the Code as section 402A(f) 

and adds a new section 402A(e) 

regarding PLESAs.8 Section 

402A(e)(5)(A) requires the plan 

administrator of a plan with a PLESA 

feature to furnish initial and annual 

notices to participants describing 

certain information regarding the 

PLESA that meet the requirements of 

section 402A(e)(5)(B). Section 

402A(e)(5)(C) permits the initial and 

annual notices required under section 

402A(e)(5)(A) to be included with any 

other notice under ERISA, including 

under section 404(c)(5)(B) or 514(e)(3) of 

ERISA, or under section 401(k)(13)(E) or 

414(w)(4) of the Code, if the other notice 


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is provided to the participant at the time 

required for that notice. 

The Department of Labor has 

provided frequently asked questions 

regarding PLESAs, including with 

respect to the permitted consolidation of 

notices under section 801(d)(3)(C) of 

ERISA (which is a parallel provision to 

section 402A(e)(5)(C) of the Code). See 

Q&A–18 of ‘‘FAQs: Pension-Linked 

Emergency Savings Accounts,’’ 

available at www.dol.gov/agencies/ebsa/ 

about-ebsa/our-activities/resourcecenter/faqs/pension-linked-emergencysavings-accounts. 

Section 341 of the SECURE 2.0 Act 

permits a plan (as defined in section 3 

of ERISA) to consolidate two or more of 

the notices required under sections 

404(c)(5)(B) and 514(e)(3) of ERISA and 

sections 401(k)(12)(D), 401(k)(13)(E), 

and 414(w)(4) of the Code into a single 

notice, provided that the combined 

notice satisfies certain requirements. 

Section 341 of the SECURE 2.0 Act does 

not prevent the consolidation of any 

other notices required under ERISA or 

the Code to the extent otherwise 

permitted by the Secretary of Labor or 

the Secretary of the Treasury (or their 

delegates), as applicable. 

On October 24, 2007, the Department 

of Labor published in the Federal 

Register (72 FR 60452) a final 

regulation, 29 CFR 2550.404c–5, 

providing relief from certain fiduciary 

responsibilities under ERISA for 

investments made on behalf of 

participants or beneficiaries who fail to 

direct the investment of assets in their 

individual accounts. The preamble to 

that final regulation indicates that the 

Department of Labor anticipates that the 

notice requirements of sections 

404(c)(5)(B) and 514(e)(3) of ERISA and 

sections 401(k)(13)(E) and 414(w)(4) of 

the Code could be satisfied in a single 

disclosure document. See 72 FR 60455 

(regarding the notice requirements 

under section 404(c)(5)(B) of ERISA and 

sections 401(k)(13)(E) and 414(w)(4) of 

the Code) and 72 FR 60466 (regarding 

the notice requirements under sections 

404(c)(5)(B) and 514(e)(3) of ERISA). 

To aid plan sponsors for the 2008 

plan year (the first plan year that a plan 

could have included a QACA or EACA), 

the IRS coordinated with the 

Department of Labor to post a sample 

‘‘Automatic Enrollment Notice,’’ 

available at www.irs.gov/pub/irs-tege/ 

sample_notice.pdf. This sample notice 

is intended to satisfy the notice 

requirements of sections 404(c)(5)(B) 

and 514(e)(3) of ERISA and sections 

401(k)(13)(E) and 414(w)(4) of the Code. 

On April 29, 2008, the Department of 

Labor issued Field Assistance Bulletin 

2008–03. Q&A–10 of Field Assistance 

Bulletin 2008–03 explains that the 

notice required under section 

401(k)(12)(D) also may be combined 

with the notice required under section 

404(c)(5)(B) of ERISA. 

Q&A–18 of ‘‘FAQs: Pension-Linked 

Emergency Savings Accounts’’ explains 

that, with respect to section 341 of the 

SECURE 2.0 Act, the Department of 

Labor retains its position regarding the 

consolidation of notices required under 

sections 404(c)(5)(B) and 514(e)(3) of 

ERISA and sections 401(k)(12)(D), 

401(k)(13)(E), and 414(w)(4) of the Code. 

Q&A–18 also explains that, under 

section 801(d)(3)(C) of ERISA, the initial 

and annual notices that must be 

furnished to PLESA participants may be 

included with any other notice under 

ERISA, including under section 

404(c)(5)(B) or 514(e)(3) of ERISA, or 

under section 401(k)(13)(E) or 414(w)(4) 

of the Code, if such other notice is 

provided to the participant at the time 

required for such notice. 

Explanation of Provisions 

I. Proposed § 1.414A–1 

A. General Rule 

In accordance with section 

414A(a)(1), the proposed regulation 

generally would provide that a CODA 

will not be treated as a qualified CODA 

unless the plan that includes the CODA 

provides that any cash or deferred 

election under the CODA must satisfy 

the automatic enrollment requirements 

of section 414A. The proposed 

regulation would clarify that the 

determination of whether a CODA fails 

to satisfy these automatic enrollment 

requirements (and, therefore, fails to be 

a qualified CODA) is made on a planyear basis. 

Similarly, in accordance with section 

414A(a)(2), the proposed regulation 

generally would provide that an annuity 

contract described in section 403(b) that 

is purchased pursuant to a salary 

reduction agreement will not be treated 

as purchased under a section 403(b) 

plan for a plan year unless the plan 

provides that any salary reduction 

agreement under the plan must satisfy 

the automatic enrollment requirements 

of section 414A. 

B. Automatic Enrollment Requirements 

1. In General 

As described in section II.A of the 

Background portion of this preamble, 

section 414A(a) generally requires a 

qualified CODA, or an annuity contract 

described in section 403(b) that is 

purchased under a salary reduction 

agreement, to satisfy the automatic 

enrollment requirements of section 

414A(b), which require the CODA or 

salary reduction agreement to be an 

EACA, as described in section 

414(w)(3), that meets the requirements 

of section 414A(b)(2) through (4). 

Section 414A(c) sets forth exceptions to 

the requirements of section 414A(a) for 

certain plans. 

The Treasury Department and the IRS 

received comments in response to 

Notice 2024–2 requesting that the 

guidance provide that certain categories 

of employees need not be covered by an 

EACA for section 414A(b) to be 

satisfied. However, although section 

414A(c) provides several exceptions to 

the requirements of section 414A(a) for 

certain types of plans, there is no 

provision in section 414A (or in section 

101(c) of the SECURE 2.0 Act) that 

excludes any category of employee from 

the automatic enrollment requirements 

of section 414A(b) of the Code if the 

plan is subject to section 414A(a). 

Accordingly, the proposed regulation 

would clarify that a CODA or salary 

reduction agreement under a plan 

satisfies the automatic enrollment 

requirements of section 414A only if the 

plan provides for an EACA that covers 

all employees in the plan who are 

eligible to elect to have contributions 

made on their behalf under the CODA 

or pursuant to the salary reduction 

agreement (including long-term, parttime employees described in section 

401(k)(15) of the Code or section 202(c) 

of ERISA). 

Commenters also requested guidance 

on whether an employee must be 

automatically enrolled if the employee 

was eligible to participate in a CODA or 

salary reduction agreement included in 

a plan before the CODA or salary 

reduction agreement became subject to 

the automatic enrollment requirements 

of section 414A(b). In response to these 

comments, the proposed regulation 

would provide an exception to 

automatic enrollment for certain 

employees who are eligible to make a 

cash or deferred election under a CODA 

or to enter into a salary reduction 

agreement that is comparable to the 

exception for certain current employees 

under a QACA, as set forth in 

§ 1.401(k)–3(j)(1)(iii). Specifically, the 

proposed regulation would clarify that 

an EACA will not fail to satisfy section 

414A merely because the default 

election under the EACA does not apply 

to an employee who, on the date the 

plan is first required to satisfy the 

automatic enrollment requirements of 

the proposed regulation, had an 

affirmative election in effect (that 

remains in effect) to have contributions 

made on the employee’s behalf under a 

cash or deferred election or a salary 


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reduction agreement (in a specified 

amount or percentage of compensation) 

or not have contributions made on the 

employee’s behalf under a cash or 

deferred election or a salary reduction 

agreement. 

2. Permissive Withdrawals 

In accordance with section 

414A(b)(2), the proposed regulation 

would provide that an EACA satisfies 

the automatic enrollment requirements 

of section 414A only if the plan that 

includes the EACA provides that any 

employee who has default elective 

contributions made under the EACA 

may elect to make a permissible 

withdrawal, as defined in section 

414(w)(2) and described in § 1.414(w)– 

1(c) (that is, a withdrawal of default 

elective contributions and earnings that 

satisfies certain timing and amount 

requirements). 

3. Contribution Requirements 

To reflect the minimum contribution 

percentage requirements of section 

414A(b)(3), the proposed regulation 

would provide that an EACA satisfies 

the automatic enrollment requirements 

of section 414A only if the default 

election made on behalf of an employee 

under the EACA is equal to a uniform 

percentage of the employee’s 

compensation that is subject to a cash or 

deferred election or salary reduction 

arrangement under the plan. The default 

election would not apply if the 

employee affirmatively elects to have 

contributions made in a different 

amount on the employee’s behalf (in a 

specified amount or percentage of 

compensation) or not have any 

contributions made on the employee’s 

behalf, under a cash or deferred election 

or a salary reduction agreement. 

In accordance with section 

414A(b)(3)(A)(i), the proposed 

regulation would provide that the 

contribution percentage under the 

default election for each employee’s 

initial period must be a uniform 

percentage that is not less than 3 

percent and not more than 10 percent. 

The proposed regulation would clarify 

that an employee’s initial period (that is, 

the employee’s ‘‘first year of 

participation’’ under section 

414A(b)(3)(A)(i)) would begin when the 

employee is first eligible to elect to have 

contributions made on the employee’s 

behalf under the plan (or if later, when 

the plan is first required to satisfy the 

automatic enrollment requirements of 

section 414A), and the employee’s 

initial period would end on the last day 

of the following plan year. 

As described in section II.A of the 

Background portion of this preamble, 

section 414A(b)(3)(A)(ii) generally 

requires automatic increases of one 

percentage point to an employee’s 

minimum default contribution 

percentage for each plan year beginning 

after each completed year of 

participation under the EACA, up to a 

maximum default contribution 

percentage of at least 10 percent (but not 

more than 15 percent). The proposed 

regulation would provide that, for each 

plan year beginning after an employee’s 

initial period, the percentage 

contribution under the default election 

must be increased by one percentage 

point until the percentage is at least 10 

percent. The proposed regulation also 

would provide that the percentage may 

not exceed 15 percent (or the lower 

percentage specified in section 

414A(b)(3)(B), if applicable). 

For purposes of satisfying the uniform 

percentage requirement of section 

414A(b)(3)(A), the proposed regulation 

would adopt the exceptions from the 

uniform percentage requirement of 

section 414(w)(3)(B), which are based 

on the similar exceptions from the 

uniform percentage requirement for a 

QACA under § 1.401(k)–3(j)(2)(iii). 

Specifically, the proposed regulation 

would clarify that an EACA does not fail 

to satisfy the uniform percentage 

requirement merely because: (1) the 

percentage used for the default election 

varies based on the number of years (or 

portions of years) since the beginning of 

the initial period for an employee, (2) 

the rate of contributions under a cash or 

deferred election or salary reduction 

agreement that is in effect for an 

employee immediately prior to the date 

that the default election under the 

proposed regulation first applies to the 

employee is not reduced, (3) the rate of 

contributions under a cash or deferred 

election or salary reduction agreement is 

limited so as not to exceed certain 

applicable limits under the Code, or (4) 

the default election is not applied 

during the period an employee is not 

permitted to have contributions made 

on the employee’s behalf under a cash 

or deferred election or salary reduction 

agreement under section 

414(u)(12)(B)(ii), which provides for a 

six-month suspension of elective 

deferrals (and employee contributions) 

if an individual elects to receive a 

distribution by reason of the individual 

being treated as having been severed 

from employment while performing 

military service. 

The proposed regulation would 

provide rules, based on the rules for a 

QACA under § 1.401(k)–3(j)(2)(iv), that 

would address the default percentage 

that would apply for an employee who 

did not have default elective 

contributions made for an entire plan 

year. The proposed regulation would 

provide different rules that could be 

used depending on whether the 

employee was not eligible to have 

contributions made on the employee’s 

behalf under a CODA or salary 

reduction agreement or had made an 

affirmative election to have 

contributions made in a different 

amount (including an election not to 

have contributions made). 

Specifically, the proposed regulation 

would permit a plan to provide that if, 

after an employee’s initial period began, 

the employee did not have default 

elective contributions made for an entire 

plan year, then the employee’s initial 

period is redetermined. If no default 

elective contributions were made solely 

because the employee was not eligible 

to elect to have contributions made on 

the employee’s behalf under a cash or 

deferred election or salary reduction 

agreement for that entire plan year, then 

a plan would be permitted to provide 

that the employee’s initial period would 

be redetermined so that it begins on the 

date the employee is again eligible to 

elect to have contributions made on the 

employee’s behalf under the plan. An 

employer would likely adopt this 

provision to determine the default 

contribution rate that applies to an 

employee who was rehired more than 

one plan year after the employee 

terminated employment. 

However, if no default elective 

contributions were made solely because 

the employee made an affirmative 

election to have contributions made on 

the employee’s behalf under a cash or 

deferred election or salary reduction 

agreement in a different amount 

(including an election not to have 

contributions made), then a plan would 

be permitted to provide that the 

employee’s initial period would be 

redetermined so that it begins on any 

date specified under the plan that is 

later than the date the employee’s 

original initial period ended. For 

example, a plan is permitted to be 

amended to provide that, as of a specific 

date, the default election will apply to 

all employees who previously made an 

affirmative election that has been in 

effect for a period of at least one plan 

year to have contributions made on 

behalf of the employees under the plan 

at a rate that is below the uniform 

percentage that applies during an initial 

period (so that the uniform percentage 

that applies during the initial period 

will apply unless the employee makes a 

new affirmative election). An employer 

might adopt such an amendment to 

facilitate an increase in the rate of 


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9This interpretation is consistent with the 

heading of section 414A(c)(4)(C) (‘‘Treatment of 

multiple employer plans’’) and the interpretation in 

§ 1.413–2(a)(2) and (3) of the substantially identical 

language in section 413(c) (‘‘a plan maintained by 

more than one employer’’). 

contributions made on behalf of its 

employees. 

4. Investment Requirements 

In accordance with the investment 

requirements of section 414A(b)(4), the 

proposed regulation would provide that 

an EACA satisfies the automatic 

enrollment requirements of section 

414A only if amounts contributed 

pursuant to the EACA, and for which no 

investment is elected by the employee, 

are invested in accordance with the 

requirements of 29 CFR 2550.404c–5 (or 

any successor regulations). 

C. Exceptions for Certain Types of Plans 

and Businesses 

1. SIMPLE 401(k) Plans 

In accordance with section 

414A(c)(1), the proposed regulation 

would provide that the automatic 

enrollment requirements of section 

414A do not apply to any SIMPLE 

401(k) plan (as described in section 

401(k)(11) and § 1.401(k)-4). 

2. Governmental and Church Plans 

In accordance with section 

414A(c)(3), the proposed regulation 

would provide that the automatic 

enrollment requirements of section 

414A do not apply to any governmental 

plan (within the meaning of section 

414(d)) or any church plan (within the 

meaning of section 414(e)). 

3. New and Small Businesses 

Section 414A(c)(4)(A) provides that 

the automatic enrollment requirements 

of section 414A(a) do not apply to any 

qualified CODA, or any annuity contract 

purchased under a plan, while the 

employer maintaining the plan (and any 

predecessor employer) has been in 

existence for less than 3 years. However, 

section 414A does not specify the date 

as of which a plan must satisfy the 

automatic enrollment requirements of 

section 414A(b) if the exception for new 

businesses under section 414A(c)(4)(A) 

ceases to apply to the plan. 

In response to Notice 2024–2, the 

Treasury Department and the IRS 

received a comment requesting 

clarification that a plan will not fail to 

satisfy the automatic enrollment 

requirements of section 414A(b) if the 

plan includes an EACA no later than the 

first plan year that begins on or after the 

third anniversary of the employer’s 

existence. The Treasury Department and 

the IRS agree that a plan should not be 

required to implement an EACA in the 

middle of a plan year. Therefore, the 

proposed regulation would clarify that 

the automatic enrollment requirements 

of section 414A do not apply to a plan 

for a plan year if, as of the beginning of 

the plan year, the employer maintaining 

the plan (aggregated with any 

predecessor employer) has been in 

existence for less than 3 years. 

Section 414A(c)(4)(B) provides that 

the automatic enrollment requirements 

of section 414A(a) do not apply to any 

qualified CODA, or any annuity contract 

purchased under a plan, earlier than the 

date that is 1 year after the close of the 

first taxable year of the employer 

maintaining the plan with respect to 

which that employer normally 

employed more than 10 employees. 

However, section 414A(c)(4)(B) does not 

specify any method for counting the 

number of employees for this purpose. 

In response to Notice 2024–2, the 

Treasury Department and the IRS 

received comments requesting 

clarification regarding the method for 

counting employees for purposes of the 

small business exception under section 

414A(c)(4)(B). One commenter raised 

the issue of how to count employees for 

this purpose but did not suggest a 

specific method. Another commenter 

recommended that the Treasury 

Department and the IRS adopt a 

monthly averaging approach, which the 

commenter explained would be similar 

to the approach used for purposes of 

section 4980H. However, section 4980H 

does not use the phrase ‘‘normally 

employed’’; instead, that phrase is used 

in section 4980B(d)(1). Therefore, the 

proposed regulation would clarify that 

the number of employees that the 

employer normally employs for a 

taxable year is determined using the 

rules of Q&A–5 of § 54.4980B–2. 

Similar to the clarification provided 

in the proposed regulation for new 

businesses, the proposed regulation 

would clarify that the automatic 

enrollment requirements of section 

414A do not apply to any qualified 

CODA, or any annuity contract 

purchased under a section 403(b) plan, 

before the first plan year that begins at 

least 12 months after the close of the 

first taxable year of the employer 

maintaining the plan with respect to 

which that employer normally 

employed more than 10 employees. 

As described in section II.A of the 

Background portion of this preamble, 

section 414A(c)(4)(C) provides special 

rules for the new and small business 

exceptions in the case of ‘‘a plan 

maintained by more than 1 employer.’’ 

The proposed regulation would clarify 

that the phrase ‘‘a plan maintained by 

more than 1 employer’’ means a 

multiple employer plan.9 Accordingly, 

the proposed regulation would reflect 

the provisions of section 414A(c)(4)(C) 

by providing that, in the case of a 

multiple employer plan, the exceptions 

for new and small businesses apply on 

an employer-by-employer basis. Thus, if 

an employer participating in a multiple 

employer plan is a new or small 

business, it would be exempt from the 

automatic enrollment requirements of 

section 414A, but that exemption would 

have no impact on whether section 

414A applies to the employees of the 

other participating employers. 

D. Exceptions for Plans Established 

Before the Enactment of Section 414A 

1. In General 

As described in section II.A of the 

Background portion of this preamble, 

section 414A(c)(2)(A) provides an 

exception from the requirements of 

section 414A(a) in the case of a qualified 

CODA, or section 403(b) plan, that is 

established before December 29, 2022, 

and Q&A A–1 and Q&A A–5 of Notice 

2024–2 provide guidance with respect 

to the date that a qualified CODA or 

section 403(b) plan is established for 

purposes of section 414A(c)(2)(A). 

Notice 2024–2 refers to a qualified 

CODA or section 403(b) plan that is 

eligible for the exception under section 

414A(c)(2)(A) as a pre-enactment 

qualified CODA or pre-enactment 

section 403(b) plan, and this 

Explanation of Provisions uses the term 

pre-enactment plan to encompass both 

pre-enactment qualified CODAs and 

pre-enactment section 403(b) plans. 

The proposed regulation would reflect 

the provisions of section 

414A(c)(2)(A)(i) and incorporate the 

guidance provided in Q&A A–1 of 

Notice 2024–2 by generally providing 

that the automatic enrollment 

requirements of section 414A do not 

apply to any plan that includes a 

qualified CODA if the plan terms 

providing for the qualified CODA were 

adopted initially before December 29, 

2022, even if the plan terms providing 

for the CODA are effective after that 

date. The proposed regulation also 

would reflect the provisions of section 

414A(c)(2)(A)(ii) and incorporate the 

guidance provided in Q&A A–5 of 

Notice 2024–2 by providing that the 

automatic enrollment requirements of 

section 414A do not apply to any 

section 403(b) plan adopted initially 

before December 29, 2022, without 

regard to the date of adoption of plan 

terms providing for salary reduction 

agreements. 


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2. Merger of Plans Established Before 

the Enactment of Section 414A 

With respect to the merger of two preenactment plans (neither of which is a 

multiple employer plan) or the merger 

of a pre-enactment plan that is not a 

multiple employer plan with a preenactment multiple employer plan, the 

proposed regulation would incorporate 

the guidance provided in Q&A A–2 of 

Notice 2024–2 (which, under Q&A A–5 

of Notice 2024–2, also applies to section 

403(b) plans). Thus, the plan after the 

merger will be treated as a preenactment plan. 

The proposed regulation generally 

would extend the guidance provided in 

Q&A A–2 of Notice 2024–2 to the 

merger of two pre-enactment multiple 

employer plans. However, the proposed 

regulation would clarify that a merger 

involving a multiple employer plan will 

not affect whether the merged plan is 

treated as a pre-enactment plan with 

respect to any employer that maintained 

the multiple employer plan prior to the 

merger. 

3. Merger of Plan Established on or After 

the Enactment of Section 414A With a 

Plan Established Before the Enactment 

of Section 414A 

With respect to the merger of a plan 

that is not a pre-enactment plan and a 

pre-enactment plan (neither of which is 

a multiple employer plan), the proposed 

regulation generally would incorporate 

the guidance provided in Q&A A–3 of 

Notice 2024–2 (which, under Q&A A–5 

of Notice 2024–2, also applies to section 

403(b) plans). With respect to the 

guidance provided in Q&A A–3 of 

Notice 2024–2 regarding a plan merger 

in connection with a transaction 

described in section 410(b)(6)(C), the 

proposed regulation generally would 

incorporate that guidance by providing 

that a pre-enactment plan will continue 

to be treated as a pre-enactment plan 

after a merger with a plan that is not a 

pre-enactment plan if there is a 

transaction described in § 1.410(b)–2(f), 

the pre-merger pre-enactment plan is 

designated as the ongoing plan, and the 

plan merger occurs within the transition 

period described in section 

410(b)(6)(C)(ii). In addition, the 

proposed regulation would expand the 

rule in Q&A A–3 of Notice 2024–2 to 

address certain situations in which a 

plan maintained by a single employer 

that is not a pre-enactment plan is 

merged into a multiple employer plan. 

Under this expansion, the multiple 

employer plan would be treated as a 

pre-enactment plan with respect to the 

employer that sponsored the merged-in 

plan if, with respect to the participating 

employer that engaged in the 

transaction, the multiple employer plan 

was treated as a pre-enactment plan 

before the transaction. As is the case of 

any merger involving a multiple 

employer plan, the merger would not 

affect whether the multiple employer 

plan is treated as a pre-enactment plan 

with respect to any other employer. 

Under section 410(b)(6)(C)(ii), the 

transition period begins on the date of 

the change in members of a controlled 

group (as described in section 414(b), 

(c), (m), or (o)) and ends on the last day 

of the first plan year beginning after the 

date of that change. In response to 

Notice 2024–2, one commenter 

requested that the guidance provided in 

Q&A A–3 be modified to extend the 

time period for a plan merger until the 

end of the first plan year that begins 

after the end of the section 410(b)(6)(C) 

transition period. The proposed 

regulation would not extend the time 

period set forth in Q&A A–3 of Notice 

2024–2 because that is the time period 

specified in the Code for an employer to 

implement changes to its plans that may 

be needed following a transaction 

described in section 410(b)(6)(C). 

With respect to a merger of a multiple 

employer plan that is a pre-enactment 

plan with a multiple employer plan that 

is not a pre-enactment plan, the 

proposed regulation would clarify the 

guidance provided in Q&A A–3 of 

Notice 2024–2 by providing that the 

merger will not affect whether the 

merged plan is treated as a preenactment plan with respect to any 

employer that maintained either 

multiple employer plan prior to the 

merger. 

4. Treatment of Adoption of, or Merger 

With, a Multiple Employer Plan 

As described in section II.A of the 

Background portion of this preamble, 

section 414A(c)(2)(B) provides special 

rules that apply in the case of an 

employer that adopts, after December 

29, 2022, a plan maintained by more 

than one employer. Consistent with the 

interpretation of the statutory phrase ‘‘a 

plan maintained by more than 1 

employer’’ in section 414A(c)(4)(C), as 

described in section I.C.3 of this 

Explanation of Provisions, the proposed 

regulation would clarify that the phrase 

‘‘a plan maintained by more than one 

employer’’ in section 414A(c)(2)(B) 

means a multiple employer plan. Thus, 

the proposed regulation would provide 

that if an employer adopts a multiple 

employer plan after December 29, 2022, 

then, with respect to that employer, the 

multiple employer plan will not be 

treated as a pre-enactment plan. 

However, this treatment would not 

affect employers who adopted the 

multiple employer plan on or before 

December 29, 2022. 

With respect to the merger of a plan 

(other than a multiple employer plan) 

with a multiple employer plan after 

December 29, 2022, the proposed 

regulation generally would incorporate 

the guidance provided in Q&A A–2 and 

Q&A A–3 of Notice 2024–2 (which, 

under Q&A A–5 of Notice 2024–2, also 

applies to section 403(b) plans). Thus, 

for example, if an employer merged a 

plan that was not a pre-enactment plan 

into a pre-enactment multiple employer 

plan after December 29, 2022, the 

multiple employer plan generally would 

not be treated as a pre-enactment plan 

with respect to that employer after the 

merger. 

In response to Notice 2024–2, the 

Treasury Department and the IRS 

received a number of comments 

expressing concern that, in the case of 

an employer maintaining a preenactment plan that is merged into a 

multiple employer plan that was 

established after December 29, 2022, the 

multiple employer plan would not be 

treated as a pre-enactment plan with 

respect to that employer after the 

merger. The comments requested 

guidance providing that if a preenactment plan is merged into a 

multiple employer plan, then the 

merged-in plan does not lose its preenactment status with respect to the 

employer that maintained the merged-in 

plan regardless of whether the multiple 

employer plan was established before or 

after December 29, 2022. In response to 

these comments, the proposed 

regulation would provide that, if an 

employer maintains a pre-enactment 

plan that is merged into a multiple 

employer plan after December 29, 2022, 

then the post-merger multiple employer 

plan will be treated as a pre-enactment 

plan with respect to that employer. This 

rule would apply regardless of the date 

of establishment of the multiple 

employer plan. 

The proposed regulation also would 

clarify that the special rule set forth in 

section 414A(c)(2)(B) regarding the 

adoption of a multiple employer plan 

after December 29, 2022, applies on an 

employer-by-employer basis. Thus, 

under the proposed regulation, neither 

an employer’s adoption of a multiple 

employer plan nor a merger of an 

employer’s plan into a multiple 

employer plan after December 29, 2022, 

would affect whether the multiple 

employer plan is treated as a preenactment plan with respect to any 

other employer maintaining the plan. 


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5. Plan Spin-Off 

The proposed regulation would 

incorporate the guidance provided in 

Q&A A–4 of Notice 2024–2 by providing 

that if a portion of a pre-enactment plan 

is spun off from that plan, the resulting 

spun-off plan will be treated as a preenactment plan if either the plan from 

which the spin-off occurred was not a 

multiple employer plan, or the plan 

from which the spin-off occurred was a 

multiple employer plan that was treated 

as a pre-enactment plan with respect to 

the employer maintaining the spun-off 

plan. 

6. Other Plan Amendments 

In response to Notice 2024–2, the 

Treasury Department and the IRS 

received comments requesting guidance 

on whether changes to a plan’s design 

or other plan amendments would affect 

the date the plan was established for 

purposes of section 414A(c)(2)(A). In 

response to these comments, the 

proposed regulation would clarify that a 

plan will not fail to be a pre-enactment 

plan merely because the plan is 

amended, provided that the amendment 

is not an amendment relating to an 

adoption of a multiple employer plan or 

a plan merger. This rule would apply 

even if the plan amendment expands 

eligibility to participate in the CODA (or 

to enter into a salary reduction 

agreement) to other employees of the 

employer that maintains the plan or to 

employees of another employer in the 

employer’s controlled group. The 

proposed regulation also would clarify 

that if a pre-enactment plan is merged 

with a plan that does not include a 

CODA or permit any salary reduction 

agreements, then the merged plan will 

continue to be a pre-enactment plan 

after the merger. 

In response to Notice 2024–2, the 

Treasury Department and the IRS also 

received comments requesting guidance 

on whether a change in a plan’s service 

provider would affect the date the plan 

was established for purposes of section 

414A(c)(2)(A). Generally, a mere change 

in a plan’s recordkeeper would not 

necessitate an amendment to the plan. 

However, if a plan’s change of 

recordkeeper or any similar change 

required a plan amendment that does 

not relate to the adoption of a multiple 

employer plan or a plan merger, then, 

under the proposed regulation, the 

amendment would not cause the plan to 

fail to be a pre-enactment plan. 

E. Applicability Date 

1. Statutory Applicability Date 

In accordance with section 101(c) of 

the SECURE 2.0 Act, the proposed 

regulation would provide that section 

414A applies to plan years beginning 

after December 31, 2024. 

2. Regulatory Applicability Date 

The proposed regulation would apply 

to plan years that begin more than 6 

months after the date that final 

regulations under section 414A are 

issued. For earlier plan years, a plan 

would be treated as having complied 

with section 414A if the plan complies 

with a reasonable, good faith 

interpretation of section 414A. 

As explained in section I.B.1 of this 

Explanation of Provisions, the proposed 

regulation would require an EACA to 

cover all employees in the plan who are 

eligible to elect to have contributions 

made on their behalf for the automatic 

enrollment requirements of the 

proposed regulation to be satisfied. If a 

CODA or section 403(b) plan that 

provides for salary reduction 

agreements becomes subject to the 

requirements of section 414A(a) as of 

the first day of the plan year beginning 

after December 31, 2024 (2025 plan 

year), but employees who became 

eligible to participate in the CODA or to 

enter into a salary reduction agreement 

before the first day of the 2025 plan year 

(and who do not have affirmative 

elections in effect on that date) are not 

covered under the EACA, then those 

employees would have to be covered 

under the EACA on the first day of the 

first plan year that the final regulations 

apply to the CODA or to the section 

403(b) plan that provides for salary 

reduction agreements (first applicable 

plan year). 

As a result, under the proposed 

regulation, unless employees who 

became eligible to participate in the 

CODA or to enter into a salary reduction 

agreement before the first day of the 

2025 plan year have affirmative 

elections in effect on the first day of the 

first applicable plan year, those 

employees would need to be 

automatically enrolled as of that date in 

order for the requirements of the 

regulation to be satisfied. In that case, 

the default contribution percentage 

would be the percentage that would 

apply under the EACA for the first 

applicable plan year had those 

employees been automatically enrolled 

starting on the first day of the 2025 plan 

year. As an alternative, the plan terms 

could reflect the provision in the 

proposed regulation permitting the 

redetermination of the initial period in 

the case of an employee who did not 

have default elective contributions 

made for an entire plan year (so that the 

plan would be permitted to provide that 

the initial contribution percentage that 

applies to those employees is the 

percentage that would apply under the 

EACA had the initial period for those 

employees started on the first day of the 

first applicable plan year). 

F. Other Matters 

1. Multiemployer Plans 

As described in section I.D.4 of this 

Explanation of provisions, the proposed 

regulation would clarify that, for 

purposes of section 414A(c)(2)(B), the 

phrase ‘‘a plan maintained by more than 

one employer’’ means ‘‘a multiple 

employer plan.’’ Thus, the phrase ‘‘a 

plan maintained by more than one 

employer’’ would not be interpreted to 

include a multiemployer plan or a plan 

maintained by members of a controlled 

group. As a result, under the proposed 

regulation, a pre-enactment 

multiemployer plan would continue to 

be treated as a pre-enactment plan with 

respect to an employer that adopts the 

plan after December 29, 2022, or with 

respect to an employer that maintains a 

plan that is merged into the 

multiemployer plan after December 29, 

2022 (regardless of the date the mergedin plan was established). Similarly, a 

pre-enactment plan would continue to 

be treated as a pre-enactment plan with 

respect to additional members of an 

employer’s controlled group if eligibility 

to participate in the plan is expanded to 

include employees of those employers 

after December 29, 2022. 

2. PLESAs 

The Department of Labor published a 

request for information soliciting public 

feedback on several sections of the 

SECURE 2.0 Act in the Federal Register 

(88 FR 54511). In response to comments 

received, this preamble addresses the 

interaction of the rules for a PLESA and 

the automatic enrollment requirements 

of section 414A. 

If a plan with a qualified CODA 

includes a PLESA, then the PLESA is 

part of the CODA. Thus, an affirmative 

election to contribute to a PLESA is an 

affirmative election to contribute to the 

CODA. If the plan is subject to the 

automatic enrollment requirements of 

section 414A, then an affirmative 

election to contribute to a PLESA would 

be an affirmative election under the 

CODA for purposes of the proposed 

regulation. 

If an employee is automatically 

enrolled to contribute to a PLESA, the 

investment requirements of section 

414A(b)(4) and proposed § 1.414A– 

1(c)(4) (which reference the Department 

of Labor’s rules for qualified default 

investment alternatives under 29 CFR 

2550.404c–5) generally would not be 


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10The Department of Labor published frequently 

asked questions online providing general 

compliance information under ERISA regarding 

PLESAs providing that, generally, the investment 

option designated for PLESAs cannot be the same 

as a plan’s qualified default investment alternative 

under 29 CFR 2550.404c–5(e)(4)(i). However, Q&A– 

15 does indicate that a PLESA’s investment option 

could meet the requirements for a qualified default 

investment alternative for a short period of time. 

11Section 414(bb)(2) defines an unenrolled 

participant as an employee who: (1) is eligible to 

participate in a defined contribution plan, (2) has 

been furnished the summary plan description 

pursuant to section 104(b) of ERISA for the plan 

and any other notices related to eligibility under the 

plan and required to be furnished under the Code 

or ERISA in connection with the participant’s 

initial eligibility to participate in the plan, (3) is not 

participating in the defined contribution plan, and 

(4) satisfies any other criteria as the Secretary of the 

Treasury may determine appropriate, as prescribed 

in guidance issued in consultation with the 

Secretary of Labor. 

satisfied with respect to the automatic 

contributions to the PLESA.10 Thus, 

automatic contributions to the PLESA 

would not be able to be used to satisfy 

the automatic enrollment requirements 

under section 414A. 

II. Section 1.414(w)–1 

A. Employees Covered by the EACA 

As explained in section I.B.1 of this 

Explanation of Provisions, proposed 

§ 1.414A–1 would clarify that, in order 

for a CODA or salary reduction 

agreement under section 403(b) to 

satisfy the automatic enrollment 

requirements of section 414A, all 

employees in the plan who are eligible 

to elect to have contributions made on 

their behalf under the CODA or 

pursuant to a salary reduction 

agreement must be covered by the 

EACA. Section 1.414(w)–1(b)(1) 

currently provides that an EACA need 

not cover all employees who are eligible 

to elect to have contributions made on 

their behalf under the applicable 

employer plan. For consistency with 

proposed § 1.414A–1, this notice of 

proposed rulemaking would amend 

§ 1.414(w)–1(b)(1) to clarify that the 

section 414A requirement to be covered 

by an EACA overrides the existing rule 

in the EACA regulations. 

B. Special Rules Relating to Notices 

1. Unenrolled Participants 

As described in section II.B of the 

Background portion of this preamble, 

section 320 of the SECURE 2.0 Act adds 

new section 414(bb) to the Code. This 

notice of proposed rulemaking would 

reflect section 414(bb) by amending 

§ 1.414(w)–1 to add a new paragraph 

under which, if the requirements of 

section 414(bb)(1) are satisfied with 

respect to an unenrolled participant (as 

defined in section 414(bb)(2)),11 then 

the requirement to give the section 

414(w)(4) notice of an employee’s rights 

and obligations does not apply to the 

participant. Thus, an unenrolled 

participant does not need to be given 

the annual EACA notice, provided that 

the participant is furnished (1) annual 

reminder notices under section 

414(bb)(1)(A), and (2) any document 

requested by the participant (if the 

participant would be entitled to receive 

the document in the absence of section 

414(bb) and section 111 of ERISA). 

2. Consolidation of Notices 

As described in section II.B of the 

Background portion of this preamble, 

section 402A(e)(5)(C) of the Code (as 

added by section 127 of the SECURE 2.0 

Act) permits the initial and annual 

notices required under section 

402A(e)(5)(A) of the Code to be included 

with any other notice under ERISA, 

including under section 404(c)(5)(B) or 

514(e)(3) of ERISA, or under section 

401(k)(13)(E) or 414(w)(4) of the Code, 

if the other notice is provided to the 

participant at the time required for that 

notice. In addition, section 341 of the 

SECURE 2.0 Act permits a plan to 

consolidate two or more of the notices 

required under sections 404(c)(5)(B) and 

514(e)(3) of ERISA and sections 

401(k)(12)(D), 401(k)(13)(E), and 

414(w)(4) of the Code into a single 

notice, provided that the combined 

notice satisfies certain requirements. 

The proposed amendment to 

§ 1.414(w)–1 would address section 

402A(e)(5)(C) of the Code and section 

341 of the SECURE 2.0 Act by adding 

a new paragraph that provides that the 

EACA notice required under § 1.414(w)– 

1(b)(3) generally may be combined with 

one or more of the notices required 

under section 404(c)(5)(B), 514(e)(3), or 

801(d)(3)(A) of ERISA and section 

401(k)(12)(D) or 401(k)(13)(E) of the 

Code. Consistent with section 341 of the 

SECURE 2.0 Act, the proposed 

regulation would require that the 

combined notice include the required 

content, clearly identify the issues 

addressed therein, be furnished at the 

time and with the frequency required 

for each notice, be presented in a 

manner that is reasonably calculated to 

be understood by the average plan 

participant, and not obscure or fail to 

highlight the primary information 

required for each notice. 

Proposed Applicability Date 

Section 1.414A–1 and the 

amendments to § 1.414(w)–1 are 

proposed to apply to plan years that 

begin more than 6 months after the date 

that final regulations under section 

414A are issued. For a plan year 

beginning after December 31, 2024, but 

before the applicability date of those 

final regulations, a plan is treated as 

having complied with section 414A if 

the plan complies with a reasonable, 

good faith interpretation of section 

414A. 

Special Analyses 

I. Regulatory Planning and Review 

Pursuant to the Memorandum of 

Agreement, Review of Treasury 

Regulations under Executive Order 

12866 (June 9, 2023), tax regulatory 

actions issued by the IRS are not subject 

to the requirements of section 6 of 

Executive Order 12866, as amended. 

Therefore, a regulatory impact 

assessment is not required. 

II. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(44 U.S.C. 3501–3520) (PRA) requires 

that a Federal agency obtain the 

approval of the Office of Management 

and Budget (OMB) before collecting 

information from the public, whether 

such collection of information is 

mandatory, voluntary, or required to 

obtain or retain a benefit. A Federal 

agency may not conduct or sponsor, and 

a person is not required to respond to, 

a collection of information unless the 

collection of information displays a 

valid control number. 

The collections of information in 

these proposed regulations contain 

third-party disclosure requirements that 

are necessary to comply with the 

statutory requirement under section 

414A of the Code (which requires 

certain CODAs or salary reduction 

agreements to be EACAs) and that are 

necessary if a plan applies section 

414(bb) (which eliminates certain 

disclosure and notice requirements for 

unenrolled participants if an annual 

notice is provided to the unenrolled 

participants). These collections of 

information generally would be 

provided by businesses or other forprofit institutions, nonprofit 

institutions, organizations, and state or 

local governments that sponsor 

retirement plans that include EACAs to 

individuals in order to meet the 

statutory notice requirements for EACAs 

under section 414(w)(4). 

The collection of information under 

proposed § 1.414(w)–1(b)(4) related to 

unenrolled participants is required in 

order for a plan to apply section 

414(bb). Section 414(bb) provides that 

no disclosure, notice, or other plan 

document is required to be furnished 

under the Code to an unenrolled 

participant if the unenrolled participant 

is furnished an annual reminder notice 

of the unenrolled participant’s 


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3102 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Proposed Rules 

eligibility to participate in the plan and 

any applicable election deadlines under 

the plan. In accordance with section 

414(bb), the proposed regulation would 

allow unenrolled participants to be 

furnished an annual reminder notice 

instead of the annual notice required for 

EACAs under section 414(w)(4) and 

§ 1.414(w)–1(b)(3). The burden is as 

follows: 

Estimated number of respondents: 

90,000–140,000 plans. 

Estimated frequency of responses: 

Varies *. 

*The notice would only need to be 

furnished to unenrolled participants once per 

year, however, plans have multiple 

unenrolled participants within a given year. 

For calculation purposes, IRS is estimating 

that each employer plan has 35 unenrolled 

participants that could receive the annual 

notice. 

Estimated average annual burden per 

respondent: 1 hour*, to draft the notice 

and provide it to unenrolled 

participants. 

*The IRS estimates that the reporting 

burden per response would not be 

burdensome because the notice does not 

need to be customized per participant. 

Estimated total annual reporting 

burden: 90,000–140,000 hours. 

The collections of information in 

these proposed regulations also contain 

third-party disclosure requirements that 

are necessary to comply with the 

statutory rule under section 414A, 

which requires certain CODAs and 

salary reduction agreements to be 

EACAs (as defined in section 414(w)(3)). 

Under § 1.414(w)–1(b)(3), initial and 

annual written notices must be given to 

each employee to whom the EACA 

applies of the employee’s rights and 

obligations under the EACA. Proposed 

§ 1.414A–1 would not change the notice 

requirements for an EACA under 

§ 1.414(w)–1 but would subject certain 

CODAs and salary reduction agreements 

to the notice requirements for an EACA 

by requiring those CODAs and salary 

reduction agreements to be EACAs (as 

required by section 414A). This 

requirement to be an EACA would not 

affect pre-enactment plans. IRS 

anticipates about 16,000 new plans 

could be established within a given year 

that would not otherwise be EACAs 

except for the requirements of section 

414A. 

Estimated number of respondents: 

16,000. 

Estimated frequency of responses: 

Varies *. 

* Notice would need to be given to eligible 

employees once per year. For calculation 

purposes, IRS is estimating that each 

employer plan has 60 eligible employees that 

would receive the annual notice. 

Estimated average annual burden per 

respondent: 1 hour *, to draft the notice 

and provide it to eligible employees. 

*The IRS estimates that the reporting 

burden per response would not be 

burdensome because the notice does not 

need to be customized per participant. 

Estimated total annual reporting 

burden: 16,000 hours. 

IRS is soliciting feedback on these 

third-party disclosure requirements and 

their associated burden. The third-party 

disclosure requirements contained in 

this notice of proposed rulemaking have 

been submitted to OMB for review in 

accordance with the Paperwork 

Reduction Act under OMB Control 

Number 1545–2135. Commenters are 

strongly encouraged to submit public 

comments electronically. Written 

comments and recommendations for the 

proposed information collection should 

be sent to www.reginfo.gov/public/do/ 

PRAMain, with copies to the Internal 

Revenue Service. Find this particular 

information collection by using the 

search function at www.reginfo.gov/ 

public/do/PRAMain. Submit electronic 

submissions for the proposed 

information collection to the IRS via 

email at pra.comments@irs.gov (indicate 

REG–100669–24 on the Subject line). 

Comments on the collection of 

information should be received by 

March 17, 2025. Comments are 

specifically requested concerning: 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the IRS, 

including whether the information will 

have practical utility; 

The accuracy of the estimated burden 

associated with the proposed collection 

of information; 

How the quality, utility, and clarity of 

the information to be collected may be 

enhanced; 

How the burden of complying with 

the proposed collection of information 

may be minimized, including through 

the application of automated collection 

techniques or other forms of information 

technology; and 

Estimates of capital or start-up costs 

and costs of operation, maintenance, 

and purchase of services to provide 

information. 

III. Regulatory Flexibility Act 

Pursuant to the Regulatory Flexibility 

Act (5 U.S.C. chapter 6), it is hereby 

certified that these proposed regulations 

will not have a significant economic 

impact on a substantial number of small 

entities. Although section 414A 

provides an exception from the 

automatic enrollment requirements for 

some small entities, other small entities 

that sponsor section 401(k) or 403(b) 

plans that are established on or after 

December 29, 2022, may need to 

provide for automatic enrollment in the 

plans and default cash or deferred or 

salary reduction elections for employees 

who are otherwise eligible to participate 

in the plans. Automatic enrollment and 

default elections, and the resulting 

additional contributions to a plan, apply 

to compensation that employees would 

have otherwise received and do not 

require additional amounts to be paid. 

Section 414A does not require plans to 

provide for nonelective contributions or 

matching contributions. Before the 

enactment of section 101 of the SECURE 

2.0 Act, plans were permitted, but not 

required, to provide for automatic 

enrollment. Accordingly, any additional 

recordkeeping or administrative costs 

resulting from the automatic enrollment 

requirements that apply to certain 

section 401(k) and 403(b) plans 

sponsored by small entities are not 

expected to be significant. Therefore, a 

regulatory flexibility analysis under the 

Regulatory Flexibility Act is not 

required. 

The Treasury Department and the IRS 

invite comments on the impacts these 

proposed regulations may have on small 

entities. Pursuant to section 7805(f) of 

the Code, these proposed regulations 

will be submitted to the Chief Counsel 

for Advocacy of the Small Business 

Administration for comment on their 

impact on small businesses. 

IV. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies assess anticipated costs 

and benefits and take certain other 

actions before issuing a final rule that 

includes any Federal mandate that may 

result in expenditures in any one year 

by a State, local, or Tribal government, 

in the aggregate, or by the private sector, 

of $100 million in 1995 dollars, updated 

annually for inflation. The proposed 

regulations do not propose any rule that 

would include any Federal mandate that 

may result in expenditures by State, 

local, or Tribal governments, or by the 

private sector, in excess of that 

threshold. 

V. Executive Order 13132: Federalism 

Executive Order 13132 (Federalism) 

prohibits an agency from publishing any 

rule that has federalism implications if 

the rule either imposes substantial, 

direct compliance costs on State and 

local governments, and is not required 

by statute, or preempts State law, unless 

the agency meets the consultation and 

funding requirements of section 6 of the 

Executive order. The proposed 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Proposed Rules 3103 

regulations do not propose rules that 

would have federalism implications, 

impose substantial direct compliance 

costs on State and local governments 

that are not required by statute, or 

preempt State law within the meaning 

of the Executive order. This is because 

section 414A, by its terms, does not 

apply to governmental plans. 

Comments and Public Hearing 

Before final regulations are adopted to 

implement section 414A of the Code, or 

to revise the regulations under section 

414(w) to reflect changes made by 

sections 101, 320, and 341 of the 

SECURE 2.0 Act, consideration will be 

given to comments regarding the notice 

of proposed rulemaking that are 

submitted timely to the IRS as 

prescribed in this preamble under the 

ADDRESSES section. The Treasury 

Department and the IRS request 

comments on all aspects of the proposed 

regulations. Comments specifically are 

requested on whether guidance is 

needed to define the term ‘‘predecessor 

employer’’ as used in section 

414A(c)(4)(A) of the Code and on the 

criteria that should apply for an 

individual to be an unenrolled 

participant under section 414(bb)(2). All 

comments will be made available at 

www.regulations.gov. Once submitted to 

the Federal eRulemaking Portal, 

comments cannot be edited or 

withdrawn. 

A public hearing has been scheduled 

for April 8, 2025, beginning at 10 a.m. 

ET in the Auditorium of the Internal 

Revenue Building, 1111 Constitution 

Avenue NW, Washington, DC. Due to 

building security procedures, visitors 

must enter at the Constitution Avenue 

entrance. In addition, all visitors must 

present photo identification to enter the 

building. Because of access restrictions, 

visitors will not be admitted beyond the 

immediate entrance area more than 30 

minutes before the hearing starts. 

Participants may alternatively attend the 

public hearing by telephone. 

The rules of 26 CFR 601.601(a)(3) 

apply to the hearing. Persons who wish 

to present oral comments must submit 

an outline of the topics to be addressed 

and the time to be devoted to each topic 

by March 17, 2025 as prescribed in the 

preamble under the DATES section. A 

period of 10 minutes will be allocated 

to each person for making comments. 

An agenda showing the scheduling of 

the speakers will be prepared after the 

deadline for receiving outlines has 

passed. Copies of the agenda will be 

available free of charge at the hearing. 

If no outline of the topics to be 

discussed at the hearing is received by 

March 17, 2025, the public hearing will 

be cancelled. If the public hearing is 

cancelled, a notice of cancellation of the 

public hearing will be published in the 

Federal Register. 

Individuals who want to testify in 

person at the public hearing must send 

an email to publichearings@irs.gov to 

have their names added to the building 

access list. The subject line of the email 

must contain the regulation number 

REG–100669–24 and the language 

TESTIFY In Person. For example, the 

subject line may say: Request to 

TESTIFY In Person at Hearing for REG– 

100669–24. 

Individuals who want to testify by 

telephone at the public hearing must 

send an email to publichearings@irs.gov 

to receive the telephone number and 

access code for the hearing. The subject 

line of the email must contain the 

regulation number REG–100669–24 and 

the language TESTIFY Telephonically. 

For example, the subject line may say: 

Request to TESTIFY Telephonically at 

Hearing for REG–100669–24. 

Individuals who want to attend the 

public hearing in person without 

testifying must also send an email to 

publichearings@irs.gov to have their 

names added to the building access list. 

The subject line of the email must 

contain the regulation number REG– 

100669–24 and the language ATTEND 

In Person. For example, the subject line 

may say: Request to ATTEND Hearing In 

Person for REG–100669–24. Requests to 

attend the public hearing must be 

received by 5 p.m. ET on April 4, 2025. 

Individuals who want to attend the 

public hearing by telephone without 

testifying must also send an email to 

publichearings@irs.gov to receive the 

telephone number and access code for 

the hearing. The subject line of the 

email must contain the regulation 

number REG–100669–24 and the 

language ATTEND Hearing 

Telephonically. For example, the 

subject line may say: Request to 

ATTEND Hearing Telephonically for 

REG–100669–24. Requests to attend the 

public hearing must be received by 5 

p.m. ET on April 4, 2025. 

Hearings will be made accessible to 

people with disabilities. To request 

special assistance during the hearing, 

please contact the Publications and 

Regulations Branch of the Office of 

Associate Chief Counsel (Procedure and 

Administration) by sending an email to 

publichearings@irs.gov (preferred) or by 

telephone at (202) 317–6901 (not a tollfree number) by April 3, 2025. 

Statement of Availability of IRS 

Documents 

IRS Revenue Procedures, Revenue 

Rulings notices, and other guidance 

cited in this document are published in 

the Internal Revenue Bulletin (or 

Cumulative Bulletin) and are available 

from the Superintendent of Documents, 

U.S. Government Publishing Office, 

Washington, DC 20402, or by visiting 

the IRS website at www.irs.gov. 

Drafting Information 

The principal authors of these 

proposed regulations are Christina M. 

Cerasale and Kara M. Soderstrom, of the 

Office of the Associate Chief Counsel 

(Employee Benefits, Exempt 

Organizations, and Employment Taxes 

(EEE)). However, other personnel from 

the Treasury Department and the IRS 

participated in the development of the 

proposed regulations. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Proposed Amendments to the 

Regulations 

Accordingly, the Treasury Department 

and the IRS propose to amend 26 CFR 

part 1 as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 continues to read, in part, as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

* * * * * 

■ Par. 2. Section 1.414(w)–1 is amended 

by: 

■ a. Revising the second sentence of 

paragraph (b)(1); and 

■ b. Adding paragraph (b)(4). 

The revision and addition read as 

follows: 

§ 1.414(w)–1 Permissible withdrawals from 

eligible automatic contribution 

arrangements. 

* * * * * 

(b) * * * 

(1) * * * Except to the extent 

required under section 414A (which 

applies to plan years beginning after 

December 31, 2024), an eligible 

automatic contribution arrangement 

need not cover all employees who are 

eligible to elect to have contributions 

made on their behalf under the 

applicable employer plan. 

* * * * * 

(4) Special rules—(i) No requirement 

to provide notice to unenrolled 

participant. If the requirements of 

section 414(bb)(1) are satisfied with 

respect to an unenrolled participant 

described in section 414(bb)(2), then the 

requirement to give the notice of an 

employee’s rights and obligations set 

forth in paragraph (b)(3) of this section 

does not apply to the participant. 


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(ii) Consolidation of notices. The 

notice described in paragraph (b)(3) of 

this section may be combined with one 

or more of the notices required under 

section 404(c)(5)(B), 514(e)(3), or 

801(d)(3)(A) of the Employee Retirement 

Income Security Act of 1974 (Public 

Law 93–406, 88 Stat. 829), as amended, 

and any notice required under section 

401(k)(12)(D) or (13)(E), provided that 

the combined notice— 

(A) Includes the required content, 

(B) Clearly identifies the issues 

addressed therein, 

(C) Is furnished at the time and with 

the frequency required for each notice, 

(D) Is presented in a manner that is 

reasonably calculated to be understood 

by the average plan participant, and 

(E) Does not obscure or fail to 

highlight the primary information 

required for each notice. 

* * * * * 

■ Par. 3. Section 1.414A–1 is added to 

read as follows: 

§ 1.414A–1 Automatic enrollment 

requirements under section 414A. 

(a) Overview. This section provides 

rules regarding the automatic 

enrollment requirements under section 

414A. Paragraph (b) of this section 

provides that a plan that includes a 

qualified cash or deferred arrangement 

under section 401(k) or a salary 

reduction agreement under section 

403(b) is required to satisfy the 

automatic enrollment requirements of 

paragraph (c) of this section unless an 

exception described in paragraph (d) of 

this section (for certain types of plans 

and businesses) or paragraph (e) of this 

section (for a cash or deferred 

arrangement or section 403(b) plan 

established before December 29, 2022) 

applies to the plan. The applicability 

date of section 414A and the 

applicability date of this section are set 

forth in paragraph (f) of this section. 

(b) General rule—(1) Qualified cash or 

deferred arrangements. Except as 

provided in paragraph (d) or (e) of this 

section, a cash or deferred arrangement 

will not be treated as a qualified cash or 

deferred arrangement described in 

§ 1.401(k)–1(a)(4)(i) for a plan year 

unless the plan that includes the 

arrangement provides that any cash or 

deferred election under the arrangement 

must satisfy the automatic enrollment 

requirements of paragraph (c) of this 

section. 

(2) Section 403(b) plans with salary 

reduction agreements. Except as 

provided in paragraph (d) or (e) of this 

section, an annuity contract described 

in section 403(b) that is purchased 

pursuant to a salary reduction 

agreement described in § 31.3121(a)(5)– 

2(a)(1) (that is, an election to reduce 

compensation pursuant to a cash or 

deferred election as defined in 

§ 1.401(k)–1(a)(3)) will not be treated as 

purchased under a section 403(b) plan 

for a plan year unless the plan provides 

that any salary reduction agreement 

under the plan must satisfy the 

automatic enrollment requirements of 

paragraph (c) of this section. 

(c) Automatic enrollment 

requirements—(1) In general—(i) 

Arrangement must be an eligible 

automatic contribution arrangement. A 

cash or deferred arrangement or salary 

reduction agreement under a plan 

satisfies the automatic enrollment 

requirements of this paragraph (c) only 

if the plan provides for an eligible 

automatic contribution arrangement (as 

defined in section 414(w)(3)) that— 

(A) Covers the employees described in 

paragraph (c)(1)(ii) of this section, and 

(B) Satisfies the additional 

requirements of paragraphs (c)(2) 

through (4) of this section. 

(ii) Employees covered under the 

eligible automatic contribution 

arrangement. The employees who must 

be covered by the eligible automatic 

contribution arrangement are all 

employees in the plan who are eligible 

to elect to have contributions made on 

their behalf under a cash or deferred 

arrangement or pursuant to a salary 

reduction agreement. 

(iii) Exception to default election for 

employees with an affirmative election. 

An eligible automatic contribution 

arrangement will not fail to satisfy the 

requirements of this paragraph (c) 

merely because the default election 

under the arrangement does not apply to 

an employee who, on the date paragraph 

(b) of this section first applies to the 

plan that includes the cash or deferred 

arrangement or salary reduction 

agreement, had an affirmative election 

in effect (that remains in effect) to— 

(A) Have contributions made on the 

employee’s behalf under a cash or 

deferred election or a salary reduction 

agreement (in a specified amount or 

percentage of compensation); or 

(B) Not have contributions made on 

the employee’s behalf under a cash or 

deferred election or a salary reduction 

agreement. 

(2) Arrangement must permit 

permissive withdrawals. An eligible 

automatic contribution arrangement 

satisfies the requirements of this 

paragraph (c)(2) only if the plan that 

includes the arrangement provides that 

any employee who has default elective 

contributions made under the 

arrangement may elect to make a 

permissible withdrawal (as defined in 

section 414(w)(2) and described in 

§ 1.414(w)–1(c)). 

(3) Contribution requirements—(i) 

Default election. An eligible automatic 

contribution arrangement under a plan 

satisfies the requirements of this 

paragraph (c)(3) only if, under the 

arrangement, the default election made 

on behalf of an employee is equal to a 

uniform percentage, as described in 

paragraph (c)(3)(ii) of this section, of the 

employee’s compensation that is subject 

to a cash or deferred election or salary 

reduction arrangement under the plan, 

unless the employee affirmatively elects 

to— 

(A) Have contributions made in a 

different amount on the employee’s 

behalf under a cash or deferred election 

or a salary reduction agreement (in a 

specified amount or percentage of 

compensation); or 

(B) Not have contributions made on 

the employee’s behalf under a cash or 

deferred election or a salary reduction 

agreement. 

(ii) Uniform percentage—(A) Initial 

period—(1) Initial percentage. The 

contribution percentage under the 

default election for each employee’s 

initial period must be a uniform 

percentage that is not less than 3 

percent and not more than 10 percent. 

(2) Beginning of initial period. An 

employee’s initial period begins when 

the employee is first eligible to elect to 

have contributions made on the 

employee’s behalf under the plan (or if 

later, when section 414A first applies to 

the plan). 

(3) End of initial period. The 

employee’s initial period ends on the 

last day of the plan year that follows the 

plan year that includes the date the 

initial period begins. 

(B) Subsequent plan years. For each 

plan year beginning after an employee’s 

initial period under the arrangement, 

the percentage contribution under the 

default election must be increased by 1 

percentage point until the percentage is 

at least 10 percent. However, the 

percentage may not exceed 15 percent 

(or the lower percentage specified in 

section 414A(b)(3)(B), if applicable). 

(iii) Exception to uniform percentage 

requirement. An eligible automatic 

contribution arrangement does not fail 

to satisfy the uniform percentage 

requirement of paragraph (c)(3)(ii) of 

this section merely because— 

(A) The percentage used for the 

default election varies based on the 

number of years (or portions of years) 

since the beginning of the initial period 

for an employee; 

(B) The rate of contributions under a 

cash or deferred election or salary 

reduction agreement that is in effect for 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Proposed Rules 3105 

an employee immediately prior to the 

date that the default election under 

paragraph (c) of this section first applies 

to the employee is not reduced; 

(C) The rate of contributions under a 

cash or deferred election or salary 

reduction agreement is limited so as not 

to exceed the applicable limits of 

sections 401(a)(17), 401(k)(16), 402(g) 

(determined with or without catch-up 

contributions), 403(b)(16), and 415; or 

(D) The default election provided 

under paragraph (c)(3)(i) of this section 

is not applied during the period an 

employee is not permitted to have 

contributions made on the employee’s 

behalf under a cash or deferred election 

or salary reduction agreement in order 

for the plan to satisfy the requirements 

of section 414(u)(12)(B)(ii). 

(iv) Treatment of periods without 

default contributions—(A) Permissive 

redetermination of initial period in 

certain situations. The uniform 

percentages described in paragraph 

(c)(3)(ii) of this section are based on the 

date an employee’s initial period begins. 

However, if, after the employee’s initial 

period began, the employee did not 

have default elective contributions 

made for an entire plan year, then the 

plan is permitted to provide that the 

employee’s initial period is 

redetermined as described in paragraph 

(c)(3)(iv)(B) or (C) of this section. 

(B) Redetermination for employee 

who became ineligible. If, for an entire 

plan year, no default elective 

contributions were made solely because 

the employee was not eligible to elect to 

have contributions made on the 

employee’s behalf under a cash or 

deferred election or salary reduction 

agreement for that plan year, then the 

plan is permitted to provide that the 

employee’s initial period is 

redetermined so that it begins on the 

date the employee is again eligible to 

elect to have contributions made on the 

employee’s behalf under the plan. 

(C) Redetermination for employee 

who remained eligible and made an 

affirmative election. If, for an entire plan 

year, no default elective contributions 

were made solely because the employee 

made an affirmative election to have 

contributions made on the employee’s 

behalf under a cash or deferred election 

or salary reduction agreement in a 

different amount (including an election 

not to have contributions made), then 

the plan is permitted to provide that the 

initial period is redetermined so that it 

begins on any date specified under the 

plan that is later than the date specified 

in paragraph (c)(3)(ii)(A)(3) of this 

section. 

(4) Investment requirements. An 

eligible automatic contribution 

arrangement satisfies the requirements 

of this paragraph (c)(4) only if amounts 

contributed pursuant to the 

arrangement, and for which no 

investment is elected by the employee, 

are invested in accordance with the 

requirements of 29 CFR 2550.404c–5 (or 

any successor regulations). 

(d) Exceptions for certain types of 

plans and businesses—(1) SIMPLE 

401(k) plans. Paragraph (b) of this 

section does not apply to any SIMPLE 

401(k) plan (as described in section 

401(k)(11) and § 1.401(k)–4). 

(2) Governmental plans. Paragraph (b) 

of this section does not apply to any 

governmental plan (within the meaning 

of section 414(d)). 

(3) Church plans. Paragraph (b) of this 

section does not apply to any church 

plan (within the meaning of section 

414(e)). 

(4) New and small businesses—(i) 

New businesses. Paragraph (b) of this 

section does not apply to any qualified 

cash or deferred arrangement, or any 

annuity contract purchased under a 

section 403(b) plan, for a plan year if, 

as of the beginning of the plan year, the 

employer maintaining the plan 

(aggregated with any predecessor 

employer) has been in existence for less 

than 3 years. 

(ii) Small businesses. Paragraph (b) of 

this section does not apply to any 

qualified cash or deferred arrangement, 

or any annuity contract purchased 

under a section 403(b) plan, before the 

first plan year that begins at least 12 

months after the close of the first taxable 

year of the employer maintaining the 

plan with respect to which that 

employer normally employed more than 

10 employees. For this purpose, the 

number of employees that the employer 

normally employs for a taxable year is 

determined using the rules of Q&A–5 of 

§ 54.4980B–2 of this chapter. 

(iii) Applicability to multiple 

employer plans. In the case of a multiple 

employer plan, the exceptions provided 

in paragraphs (d)(4)(i) and (ii) of this 

section apply on an employer-byemployer basis. 

(iv) Example—(A) Facts. Employer Q 

has been in existence since July 1, 2026, 

and does not have a predecessor 

employer. Employer Q maintains Plan 

X, which has a plan year that is the 

calendar year and includes a cash or 

deferred arrangement. Plan X was 

effective on January 1, 2027, and 

provides that a cash or deferred election 

must be an affirmative election. 

Employee M, who became eligible to 

elect to have contributions made on 

Employee M’s behalf under Plan X on 

January 1, 2027, made an affirmative 

election not to have elective 

contributions made on Employee M’s 

behalf and that affirmative election is in 

effect on January 1, 2030. Employee N, 

who also became eligible to elect to 

have contributions made on Employee 

N’s behalf under Plan X on January 1, 

2027, has not made any election to have 

(or not have) contributions made on 

Employee N’s behalf under Plan X. 

Effective January 1, 2030, Plan X is 

amended to include an eligible 

automatic contribution arrangement that 

satisfies the requirements of paragraphs 

(c)(2) through (4) of this section. The 

amendment provides that an employee 

who has a cash or deferred election that 

is an affirmative election and is in effect 

on January 1, 2030, is not subject to the 

default election under the eligible 

automatic contribution arrangement that 

is included in Plan X. 

(B) Analysis and Conclusion. Because 

the exception for new businesses set 

forth in paragraph (d)(4)(i) of this 

section ceases to apply to Plan X for 

plan years beginning on or after January 

1, 2030, paragraph (b) of this section 

first applies to Plan X as of that date. 

Pursuant to paragraph (c)(1)(iii) of this 

section, the eligible automatic 

contribution arrangement required to be 

included in Plan X for plan years 

beginning on January 1, 2030, does not 

fail to satisfy the requirements of 

paragraph (c) of this section merely 

because the default election under the 

arrangement does not apply to 

Employee M as a result of Employee M’s 

affirmative election. However, Plan X 

does not satisfy the requirements of 

section 414A unless the default election 

in paragraph (c)(3) of this section 

applies to Employee N because of the 

absence of an affirmative election made 

by Employee N to have elective 

contributions made on Employee N’s 

behalf in a different amount (or to not 

have elective contributions made on 

Employee N’s behalf). 

(e) Exception for plans established 

before the enactment of section 414A— 

(1) In general. Subject to the rules of 

application in paragraphs (e)(2) through 

(6) of this section, paragraph (b) of this 

section does not apply to— 

(i) Any plan that includes a qualified 

cash or deferred arrangement if the plan 

terms providing for the qualified cash or 

deferred arrangement were adopted 

initially before December 29, 2022 (the 

date of the enactment of section 414A), 

even if the plan terms providing for the 

cash or deferred arrangement are 

effective after that date, or 

(ii) Any section 403(b) plan adopted 

initially before December 29, 2022, 

without regard to the date of adoption 

of plan terms providing for salary 

reduction agreements. 


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(2) Merger of plans established before 

the enactment of section 414A—(i) 

General rule. If two plans described in 

paragraph (e)(1)(i) of this section are 

merged, then the merged plan will be 

treated as a plan described in paragraph 

(e)(1)(i) of this section. Similarly, if two 

section 403(b) plans described in 

paragraph (e)(1)(ii) of this section are 

merged, then the merged plan will be 

treated as a section 403(b) plan 

described in paragraph (e)(1)(ii) of this 

section. 

(ii) Effect of merger of multiple 

employer plans on participating 

employers. If either of the plans 

described in paragraph (e)(2)(i) of this 

section are multiple employer plans, 

then the merger will not affect whether 

the merged plan is treated as a plan 

described in paragraph (e)(1) of this 

section with respect to any employer 

that maintained the multiple employer 

plan prior to the merger. 

(3) Merger of a plan established on or 

after the enactment of section 414A with 

a plan established before the enactment 

of section 414A—(i) General rule—(A) 

Section 401(k) plans. Except as 

provided in paragraphs (e)(3)(ii), (iii), 

and (4)(ii) of this section, if a plan that 

includes a cash or deferred arrangement 

and that is not described in paragraph 

(e)(1)(i) of this section is merged with a 

plan described in paragraph (e)(1)(i) of 

this section, then the merged plan will 

not be treated as a plan described in 

paragraph (e)(1)(i) of this section. 

(B) Section 403(b) plans. Except as 

provided in paragraphs (e)(3)(ii), (iii), 

and (4)(ii) of this section, if a section 

403(b) plan that is not described in 

paragraph (e)(1)(ii) of this section is 

merged with a plan described in 

paragraph (e)(1)(ii) of this section, then 

the merged plan will not be treated as 

a plan described in paragraph (e)(1)(ii) 

of this section. 

(ii) Exception for certain transactions. 

A plan that is maintained by a single 

employer and described in paragraph 

(e)(1) of this section will continue to be 

treated as described in paragraph (e)(1) 

of this section after a merger described 

in paragraph (e)(3)(i) of this section, if— 

(A) There is a transaction described in 

§ 1.410(b)–2(f), 

(B) The plan described in paragraph 

(e)(1) of this section is designated as the 

ongoing plan, and 

(C) The plan merger occurs within the 

transition period described in section 

410(b)(6)(C)(ii). 

(iii) Applicability to multiple 

employer plans—(A) Applicability of 

exception for certain transactions 

involving a merger into a multiple 

employer plan. In the case of a merger 

of a plan that is not a multiple employer 

plan and not described in paragraph 

(e)(1) of this section into a multiple 

employer plan that is designated as the 

ongoing plan, paragraph (e)(3)(ii) of this 

section applies even though the ongoing 

plan is a multiple employer plan and 

without regard to whether that plan is 

a plan described in paragraph (e)(1) of 

this section, provided that prior to the 

transaction described in paragraph 

(e)(3)(ii)(A) of this section, the multiple 

employer plan was treated as a plan 

described in paragraph (e)(1) of this 

section with respect to the employer 

that maintained the multiple employer 

plan and engaged in the transaction. 

(B) Merger of multiple employer 

plans. If both of the plans described in 

paragraph (e)(3)(i) of this section are 

multiple employer plans, then the 

exception in paragraph (e)(3)(ii) of this 

section does not apply. In such a case, 

the merger will not affect whether the 

merged plan is treated as a plan 

described in paragraph (e)(1) of this 

section with respect to any employer 

that maintained either multiple 

employer plan prior to the merger. 

(4) Treatment of adoption of, or 

merger with, a multiple employer plan— 

(i) In general. If, after December 29, 

2022, an employer adopts a multiple 

employer plan, then, with respect to 

that employer, the multiple employer 

plan will not be treated as a plan 

described in paragraph (e)(1) of this 

section. The same treatment will apply 

if the employer maintains a plan other 

than a multiple employer plan that is 

merged with a multiple employer plan 

after December 29, 2022, unless the 

merger is described in paragraph 

(e)(3)(iii) of this section. 

(ii) Exception for mergers involving 

plans established before the enactment 

of section 414A. Paragraph (e)(4)(i) of 

this section does not apply if the plan 

that is merged into the multiple 

employer plan is a plan described in 

paragraph (e)(1) of this section. Thus, if 

the employer maintains a plan 

described in paragraph (e)(1) of this 

section that is merged into the multiple 

employer plan after December 29, 2022, 

then the multiple employer plan will be 

treated as a plan described in paragraph 

(e)(1) of this section with respect to that 

employer. 

(iii) Effect on other participating 

employers. Neither an adoption nor a 

merger described in paragraph (e)(4)(i) 

or (ii) of this section affects whether the 

multiple employer plan is treated as a 

plan described in paragraph (e)(1) of 

this section with respect to any other 

employer maintaining the plan. 

(5) Plan spin-off. If a portion of a plan 

described in paragraph (e)(1) of this 

section is spun off from that plan, the 

resulting spun-off plan will be treated as 

a plan described in paragraph (e)(1) of 

this section if either— 

(i) The plan from which the spin-off 

occurred was not a multiple employer 

plan, or 

(ii) The plan from which the spin-off 

occurred was a multiple employer plan 

that was treated as described in 

paragraph (e)(1) of this section with 

respect to the employer maintaining the 

spun-off plan. 

(6) Other plan amendments—(i) 

Treatment of amendments to a plan 

established before the enactment of 

section 414A. A plan described in 

paragraph (e)(1) of this section will not 

fail to be described in paragraph (e)(1) 

of this section merely because the plan 

is amended, provided that the 

amendment is not an amendment 

relating to an action described in 

paragraph (e)(2), (3), or (4) of this 

section. The preceding sentence applies 

even if the amendment expands 

eligibility to participate in the cash or 

deferred arrangement, or to enter into a 

salary reduction agreement, to other 

employees of the employer that 

maintains the plan or to employees of 

another employer that is aggregated 

with the employer that maintains the 

plan under section 414(b), (c), or (m). 

(ii) Mergers with plans that do not 

include cash or deferred arrangements 

or salary reduction agreements. If an 

employer maintains a plan that is 

described in paragraph (e)(1) of this 

section and that plan is merged with a 

plan that does not include a cash or 

deferred arrangement or permit a salary 

reduction agreement, then the merged 

plan will continue to be a plan 

described in paragraph (e)(1) of this 

section after the merger. 

(7) Examples. The following examples 

illustrate the application of this 

paragraph (e). For purposes of the 

examples, each plan is maintained on a 

calendar-year basis, includes a cash or 

deferred arrangement that was adopted 

on the same date that the plan was 

adopted, and is not a SIMPLE 401(k) 

plan, governmental plan, or church 

plan. These examples assume that this 

section applies for plan years beginning 

on or after January 1, 2026, and, unless 

otherwise specifically provided, any 

plan merger does not occur in 

connection with a transaction described 

in § 1.410(b)–2(f). 

(i) Example 1—(A) Facts. Plan A, 

which is maintained by a single 

employer, Employer R, was adopted on 

January 1, 2021. Plan B, which is 

maintained by a single employer, 

Employer S, was adopted on January 1, 

2025. On July 1, 2026, Plan A is merged 


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with Plan B, and Plan A is the surviving 

plan in the merger. 

(B) Analysis and conclusion. The 

merger is a merger of a plan described 

in paragraph (e)(1)(i) of this section with 

a plan that is not described in paragraph 

(e)(1)(i) of this section and is not a 

merger described in paragraph (e)(3)(ii) 

or (4) of this section. Under paragraph 

(e)(3)(i)(A) of this section, Plan A will 

no longer be a plan described in 

paragraph (e)(1)(i) of this section and 

will be subject to paragraph (b) of this 

section after the merger (unless an 

exception described in paragraph (d)(4) 

of this section, relating to new or small 

businesses, applies to Employer R). 

(ii) Example 2—(A) Facts. The facts 

are the same as in paragraph (e)(7)(i) of 

this section (Example 1), except that 

there is an acquisition described in 

§ 1.410(b)–2(f), and the plan merger 

occurs within the transition period 

described in section 410(b)(6)(C)(ii). 

(B) Analysis and conclusion. The 

merger satisfies the requirements of 

paragraph (e)(3)(ii) of this section. 

Accordingly, Plan A will continue to be 

excepted from paragraph (b) of this 

section as a plan described in paragraph 

(e)(1)(i) of this section after the merger. 

(iii) Example 3—(A) Facts. Plan C, a 

multiple employer plan, was established 

on January 1, 2021. Plan D, a plan 

maintained by Employer T that is not a 

multiple employer plan, was adopted on 

January 1, 2024. Plan D merges with 

Plan C on December 31, 2024. 

(B) Analysis and conclusion. The 

merger is described in paragraph 

(e)(4)(i) of this section and because Plan 

D is not a plan described in paragraph 

(e)(1)(i) of this section, the merger is not 

excepted under paragraph (e)(4)(ii) of 

this section. Similarly, because there 

was no transaction described in 

§ 1.410(b)–2(f), the merger is not 

described in paragraph (e)(3)(iii) of this 

section. Accordingly, with respect to 

Employer T, Plan C will not be a plan 

described in paragraph (e)(1)(i) of this 

section and will be subject to paragraph 

(b) of this section after the merger 

(unless an exception described in 

paragraph (d)(4) of this section, relating 

to new or small businesses, continues to 

apply to Employer T). However, under 

paragraph (e)(4)(iii) of this section, the 

merger does not affect whether Plan C 

is treated as a plan described in 

paragraph (e)(1)(i) of this section with 

respect to any other employers. 

(iv) Example 4—(A) Facts. Plan E, a 

plan maintained by Employer U that is 

not a multiple employer plan, was 

adopted on January 1, 2021. Plan F, a 

multiple employer plan, was established 

on January 1, 2024. Plan E merges with 

Plan F on December 31, 2024. 

(B) Analysis and conclusion. Under 

paragraph (e)(4)(ii) of this section, the 

portion of Plan F that applies with 

respect to Employer U will continue to 

be excepted from paragraph (b) of this 

section as a plan described in paragraph 

(e)(1)(i) of this section after the merger. 

However, under paragraph (e)(4)(iii) of 

this section, the merger does not affect 

whether Plan F is treated as a plan 

described in paragraph (e)(1)(i) of this 

section with respect to any other 

employers. 

(v) Example 5—(A) Facts. Plan G, a 

plan maintained by Employer V that is 

not a multiple employer plan, was 

adopted on January 1, 2021. Plan G is 

amended, effective January 1, 2026, to 

add an additional participating 

employer, a subsidiary that is 100 

percent owned by Employer V. 

(B) Analysis and conclusion. Because 

the expansion of eligibility is not an 

amendment relating to an action 

described in paragraph (e)(2), (3), or (4) 

of this section, Plan G will continue to 

be excepted from paragraph (b) of this 

section as a plan described in paragraph 

(e)(1)(i) of this section after the 

amendment pursuant to paragraph 

(e)(6)(i) of this section. 

(vi) Example 6—(A) Facts. Plan J, a 

multiple employer plan, was established 

on January 1, 2021. Employer W adopts 

Plan J on January 1, 2022. Effective 

January 1, 2026, the assets and account 

balances attributable to the employees 

of Employer W are spun off to form a 

new plan, Plan K, maintained solely by 

Employer W. 

(B) Analysis and Conclusion. Under 

paragraph (e)(5)(ii) of this section, Plan 

K will be excepted from paragraph (b) 

of this section as a plan described in 

paragraph (e)(1)(i) of this section. 

(f) Applicability dates—(1) Statutory 

applicability date. Section 414A applies 

to plan years beginning after December 

31, 2024. 

(2) Regulatory applicability date. This 

section applies to plan years beginning 

after [DATE SIX MONTHS AFTER 

DATE OF PUBLICATION OF FINAL 

RULE]. For earlier plan years, a plan is 

treated as having complied with section 

414A if the plan complies with a 

reasonable, good faith interpretation of 

section 414A. 

Douglas W. O’Donnell, 

Deputy Commissioner. 

[FR Doc. 2025–00501 Filed 1–10–25; 8:45 am] 

BILLING CODE 4830–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 751 

[EPA–HQ–OPPT–2021–0277; FRL–8331–02– 

OCSPP] 

RIN 2070–AK87 

C.I. Pigment Violet 29 (PV29); 

Regulation Under the Toxic 

Substances Control Act (TSCA) 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The Environmental Protection 

Agency (EPA or Agency) is proposing to 

address the unreasonable risk of injury 

to human health presented by C.I. 

Pigment Violet 29 (CASRN 81–33–4, 

also known as PV29), under its 

conditions of use as documented in 

EPA’s January 2021 Risk Evaluation for 

PV29 and the September 2022 Revised 

Risk Determination for PV29 prepared 

under TSCA. TSCA requires that EPA 

address by rule any unreasonable risk of 

injury to health or the environment 

identified in a TSCA risk evaluation and 

apply requirements to the extent 

necessary so the chemical no longer 

presents unreasonable risk. To address 

the identified unreasonable risk, EPA is 

proposing requirements to protect 

workers from the unreasonable risk of 

PV29 during manufacturing and 

processing, certain industrial and 

commercial uses of the chemical, and 

disposal, while also allowing for a 

reasonable transition period prior to 

enforcement of said requirements. 

DATES: Comments must be received on 

or before February 28, 2025. Under the 

Paperwork Reduction Act (PRA), 

comments on the information collection 

provisions are best assured of 

consideration if the Office of 

Management and Budget (OMB) 

receives a copy of your comments on or 

before February 13, 2025. 

ADDRESSES: Submit your comments, 

identified by docket identification (ID) 

number EPA–HQ–OPPT–2021–0277, 

online at https://www.regulations.gov. 

Follow the online instructions for 

submitting comments. Do not submit 

electronically any information you 

consider to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Additional instructions on commenting 

or visiting the docket, along with more 

information about dockets generally, is 

available at https://www.epa.gov/ 

dockets. 

FOR FURTHER INFORMATION CONTACT: 


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