SECURE 2.0 Act Section 121 permits an employer that does not sponsor a retirement plan to offer a starter 401(k) plan (or safe harbor 403(b) plan). A starter 401(k) plan (or safe harbor 403(b) plan) would generally require that all employees be default enrolled in the plan at a 3% to 15% of compensation deferral rate.

The limit on annual deferrals would be the same as the IRA contribution limit, including the additional catchup contributions.

Section 121 is effective for plan years beginning after December 31, 2023.