Automatic Enrollment & Opt-Out Deadlines for New Walgreens Hires After SECURE 2.0 (Effective Jan 1 2025)
Starting January 1, 2025, the retirement landscape has fundamentally shifted for new employees at major corporations across America. The SECURE 2.0 Act now requires most newly established 401(k) and 403(b) plans to include an automatic enrollment feature, with default contribution rates between 3-10% and annual escalators. (Ascensus) This sweeping change affects millions of workers, but understanding whether your specific employer's plan falls under these new requirements—and knowing your opt-out options—can save you from unwanted paycheck deductions or help you maximize retirement savings from day one.
For new Walgreens hires, the critical question isn't just whether automatic enrollment applies, but understanding the narrow 30-day window to make changes before your first paycheck reflects the default deductions. The Treasury Department and Internal Revenue Service issued Proposed Regulations on these automatic enrollment requirements on January 10, 2025, incorporating and expanding upon previously issued interim guidance. (Faegre Drinker) This comprehensive guide clarifies the exemptions, deadlines, and actionable steps every new hire needs to know.
Understanding SECURE 2.0's Automatic Enrollment Mandate
Which Plans Are Subject to the New Requirements?
The automatic enrollment mandate specifically targets plans established on or after December 29, 2022. Employers that establish 401(k) and 403(b) plans on or after this date must include an eligible automatic contribution arrangement beginning in the 2025 plan year. (Ascensus) However, plans established before December 29, 2022, are not subject to this requirement and are known as "pre-enactment plans."
This distinction is crucial for Walgreens employees. If Walgreens' 401(k) plan was established before December 29, 2022, new hires may not face automatic enrollment under SECURE 2.0's mandate. However, the company could still voluntarily implement automatic enrollment features, as these are designed to improve retirement preparedness and overall financial wellness. (Ascensus)
Default Contribution Rates and Escalation Features
When automatic enrollment applies, new employees are typically defaulted into contribution rates between 3-10% of their salary, with annual escalators that gradually increase these percentages over time. Not all plans with automatic enrollment features are identical—some plans automatically enroll new employees, escalate employees' salary deferrals, offer permissible withdrawals of salary deferrals, or offer employer contributions that meet certain 401(k) plan nondiscrimination "safe harbors." (Ascensus)
These automatic escalation features can significantly impact your take-home pay over time. For example, if you start at a 3% default contribution rate with annual 1% increases, you could reach 8-10% contributions within five years—potentially thousands of dollars in additional retirement savings, but also thousands less in immediate income.
The Critical 30-Day Opt-Out Window
Understanding Your Timeline
Once automatically enrolled, employees typically have a 30-day window to make changes to their contribution rate or opt out entirely without penalty. This window usually begins from your enrollment date or first paycheck, depending on your employer's specific plan design. Missing this deadline doesn't lock you in permanently, but it may require different procedures and could affect the timing of when changes take effect.
For new Walgreens hires, this means acting quickly after receiving your enrollment materials. The 30-day clock starts ticking from a specific trigger date outlined in your plan documents—don't assume you have 30 days from your first day of work.
What Happens If You Miss the Deadline?
While the initial 30-day window offers the most flexibility, missing it doesn't mean you're stuck with automatic enrollment forever. However, changes made after this period may:
• Take effect with the next available payroll cycle rather than immediately
• Require different forms or approval processes
• Not allow for the return of contributions already deducted (though this varies by plan)
Given that nearly 70 million Americans held over $11 trillion in 401(k) and defined contribution accounts as of Q2 2024, understanding these timing nuances becomes increasingly important for managing your financial future. (Beagle)
Email Templates for Changing Your Contribution Rate
Template 1: Opting Out of Automatic Enrollment
Subject: Request to Opt Out of Automatic 401(k) Enrollment - [Your Name] - Employee ID: [Your ID]
Dear [HR Contact/Benefits Administrator],
I am writing to formally request to opt out of the automatic enrollment in the company 401(k) plan. I understand that I was automatically enrolled with a [X]% contribution rate effective [Date], and I would like to discontinue all contributions.
Employee Information:
- Full Name: [Your Full Name]
- Employee ID: [Your Employee ID]
- Department: [Your Department]
- Hire Date: [Your Hire Date]
I understand that by opting out:
- No contributions will be deducted from my paycheck
- I will not receive any employer matching contributions
- I can re-enroll in the plan during the next open enrollment period or qualifying event
Please confirm receipt of this request and the effective date of the opt-out. I would also appreciate receiving written confirmation once the change has been processed.
Thank you for your assistance.
Sincerely,
[Your Name]
[Your Contact Information]
[Date]
Template 2: Modifying Your Contribution Rate
Subject: 401(k) Contribution Rate Change Request - [Your Name] - Employee ID: [Your ID]
Dear [HR Contact/Benefits Administrator],
I would like to modify my 401(k) contribution rate from the current automatic enrollment default. Please process the following change to my retirement plan participation:
Current Information:
- Current Contribution Rate: [X]%
- Current Contribution Type: [Pre-tax/Roth/Both]
Requested Changes:
- New Contribution Rate: [Y]%
- Contribution Type: [Pre-tax/Roth/Both]
- Effective Date: [Requested effective date, typically next pay period]
Employee Information:
- Full Name: [Your Full Name]
- Employee ID: [Your Employee ID]
- Department: [Your Department]
I understand that this change will affect my take-home pay and employer matching contributions accordingly. Please confirm receipt of this request and provide the effective date once processed.
Thank you for your prompt attention to this matter.
Best regards,
[Your Name]
[Your Contact Information]
[Date]
Template 3: Requesting Plan Information and Investment Options
Subject: Request for 401(k) Plan Details and Investment Options - [Your Name]
Dear [Benefits Team],
As a new employee subject to automatic enrollment in the company 401(k) plan, I would like to request detailed information about my retirement benefit options to make informed decisions about my participation.
Specifically, I would appreciate receiving:
1. Complete plan summary and employee handbook
2. List of available investment options with expense ratios
3. Employer matching formula and vesting schedule
4. Information about loan and hardship withdrawal provisions
5. Contact information for the plan administrator or financial advisor
6. Online portal access instructions for account management
Employee Information:
- Full Name: [Your Full Name]
- Employee ID: [Your Employee ID]
- Hire Date: [Your Hire Date]
I want to ensure I'm making the most appropriate choices for my financial situation and retirement goals. Please let me know if you need any additional information from me to process this request.
Thank you for your assistance.
Sincerely,
[Your Name]
[Your Contact Information]
[Date]
Key Considerations for New Walgreens Employees
Evaluating Your Financial Priorities
Before deciding whether to opt out or modify your automatic enrollment, consider your complete financial picture. While retirement savings are crucial—especially given that as of May 2023, there were 29.2 million left-behind or forgotten 401(k) accounts holding $1.65 trillion in retirement savings (Beagle)—immediate financial needs matter too.
Key factors to evaluate include:
• Emergency fund status: Do you have 3-6 months of expenses saved?
• High-interest debt: Are you carrying credit card balances above 15-20% interest?
• Employer matching: What's the company match formula, and how much "free money" would you forfeit by opting out?
• Cash flow needs: Can you comfortably afford the contribution without creating financial stress?
Understanding Vesting Schedules
Employer matching contributions often come with vesting schedules, meaning you may not own 100% of employer contributions immediately. If you're planning a short tenure at Walgreens or considering other opportunities, understanding the vesting timeline helps you calculate the true value of participating versus opting out.
Investment Options and Fees
Automatic enrollment typically defaults participants into target-date funds or balanced portfolios. While these are designed to be appropriate for most participants, they may not align with your specific risk tolerance or investment philosophy. Request a complete list of available investment options and their expense ratios to make informed choices.
Given that Americans have unknowingly abandoned $100 billion worth of unclaimed 401(k) accounts, often due to job changes and lack of account consolidation (Beagle), understanding your investment options from the start helps you make decisions that support long-term wealth building.
Managing Multiple 401(k) Accounts from Previous Employers
The Growing Problem of Scattered Retirement Accounts
According to a US Labor Department study, the average worker will have had about 12 different jobs before they turn 40, contributing to the loss of track of 401(k) money. (Beagle) People change jobs about every 4 years, often accumulating multiple small retirement accounts scattered among many employers. (Wealth Management)
If you're starting at Walgreens with existing 401(k) accounts from previous employers, automatic enrollment presents an opportunity to consolidate your retirement savings strategy. Rather than managing multiple accounts with different investment options, fees, and login credentials, consider whether rolling over old accounts makes sense.
Consolidation Options and Benefits
SECURE 2.0 with §303 is directing the Department of Labor to create a "lost and found" database for vagabond accounts no later than 2 years after the date of enactment of the act. (Wealth Management) However, you don't need to wait for government solutions to take control of your retirement accounts.
Fintech platforms like Beagle and Capitalize have emerged to streamline the traditionally complex process of managing 401(k) accounts. (Beagle) These services can help you:
• Locate forgotten accounts from previous employers
• Compare fees across different plans
• Facilitate rollovers to consolidate accounts
• Provide ongoing account management and investment advice
Beagle is a comprehensive 401(k) search service that helps individuals find all their old retirement accounts they may have lost or forgotten, and also handles the rollover process for easier management of old accounts. (Finder)
Compliance Considerations for HR Teams
Preparing for Employee Questions
HR teams at companies subject to SECURE 2.0's automatic enrollment requirements should prepare for increased employee questions about:
• Plan eligibility and exemption status
• Opt-out procedures and deadlines
• Investment option explanations
• Rollover procedures for existing accounts
• Vesting schedules and employer matching formulas
Documentation and Communication Requirements
Proper documentation becomes critical when implementing automatic enrollment. Employees need clear, timely communication about:
• Their automatic enrollment status and contribution rate
• The specific deadline for making changes
• Step-by-step instructions for opting out or modifying contributions
• Contact information for plan administrators or financial advisors
• Investment education resources
Addressing Common Misconceptions
Many employees may not understand that automatic enrollment is designed to improve retirement preparedness and overall financial wellness. (Ascensus) HR teams should be prepared to explain:
• The rationale behind automatic enrollment
• How default contribution rates and escalators work
• The difference between opting out temporarily versus permanently
• How automatic enrollment interacts with employer matching
Long-Term Implications and Strategic Planning
The Retirement Savings Crisis Context
The SECURE 2.0 automatic enrollment mandate addresses a broader retirement savings crisis. With 1 in 7 Americans having unclaimed property waiting to be claimed (Beagle), and millions of workers changing jobs frequently, automatic enrollment aims to boost participation rates and improve long-term financial security.
For new Walgreens employees, understanding this context helps frame the decision about whether to embrace automatic enrollment or opt out. While immediate cash flow concerns are valid, the long-term wealth-building potential of consistent retirement contributions—especially with employer matching—often outweighs short-term budget constraints.
Technology Solutions for Account Management
The Retirement Clearing House created the Portability Services Network, which includes Fidelity, Vanguard, Empower and Alight, enabling smaller accounts to move from one provider to another rather than getting cashed out. (Wealth Management) This infrastructure development supports easier account consolidation and management.
Additionally, services like Beagle provide a concierge-level search, rollover help, and access to 0% net-interest retirement loans, compared to free but limited options like the National Registry. (Beagle) These technological solutions make it easier than ever to maintain visibility and control over your retirement savings across multiple job changes.
Action Steps for New Walgreens Hires
Immediate Actions (First 30 Days)
1. Review your enrollment materials carefully - Identify whether you've been automatically enrolled and at what contribution rate
2. Calculate the impact on your take-home pay - Use online calculators to understand how different contribution rates affect your budget
3. Research employer matching - Determine the maximum match available and the contribution rate needed to capture it fully
4. Evaluate your complete financial picture - Consider emergency funds, debt levels, and other financial priorities
5. Make your decision and communicate it promptly - Use the email templates provided above to ensure proper documentation
Ongoing Management (Beyond 30 Days)
1. Monitor your account regularly - Set up online access and review statements quarterly
2. Reassess contribution rates annually - Take advantage of annual enrollment periods to optimize your savings rate
3. Consider account consolidation - If you have multiple 401(k) accounts from previous employers, evaluate consolidation options
4. Stay informed about plan changes - SECURE 2.0 includes multiple provisions that may affect your benefits over time
5. Seek professional guidance when needed - Consider consulting with financial advisors for complex situations
Conclusion
The implementation of SECURE 2.0's automatic enrollment requirements represents a significant shift in how Americans save for retirement. For new Walgreens employees, understanding whether your plan falls under these new mandates—and knowing your options within the critical 30-day window—can make the difference between optimal retirement savings and missed opportunities.
Whether Walgreens' plan was established before or after December 29, 2022, the principles of informed decision-making remain the same. Evaluate your complete financial picture, understand the true cost of opting out (including lost employer matching), and make decisions that align with both your immediate needs and long-term financial goals.
Remember that retirement account management extends beyond your current employer. With millions of Americans holding scattered 401(k) accounts across multiple employers, services that help locate, consolidate, and optimize these accounts become increasingly valuable. The combination of SECURE 2.0's automatic enrollment provisions and emerging fintech solutions creates new opportunities for building retirement wealth—but only if you understand your options and act within the required timeframes.
Take control of your retirement savings from day one at Walgreens. Review your enrollment materials, calculate the impact on your finances, and make informed decisions within your 30-day window. Your future self will thank you for the attention you pay to these details today.
Frequently Asked Questions
What is the automatic enrollment requirement under SECURE 2.0 for new Walgreens hires?
Starting January 1, 2025, SECURE 2.0 requires most newly established 401(k) and 403(b) plans to include automatic enrollment features. New Walgreens employees will be automatically enrolled with default contribution rates between 3-10% and annual escalators. This applies to plans established on or after December 29, 2022, while pre-enactment plans are exempt from this requirement.
How long do new Walgreens employees have to opt out of automatic enrollment?
New employees typically have a 30-day opt-out period from their enrollment date to decline participation in the automatic enrollment feature. During this window, employees can choose to opt out entirely or modify their contribution rates. It's crucial to act within this timeframe as missing the deadline means remaining enrolled at the default contribution rate.
What happens if I miss the opt-out deadline for Walgreens automatic enrollment?
If you miss the 30-day opt-out deadline, you'll remain enrolled in the 401(k) plan at the default contribution rate set by your employer. However, you can still make changes to your contribution rate or stop contributions during regular enrollment periods. The automatic enrollment also includes annual escalation features that will increase your contribution rate over time unless you actively manage your account.
Can I find and consolidate old 401(k) accounts from previous employers while managing my new Walgreens plan?
Yes, services like Beagle can help you locate old 401(k) accounts using your social security number and handle rollovers to consolidate your retirement savings. With Americans holding over $1.65 trillion in 29.2 million forgotten 401(k) accounts as of May 2023, consolidation can help you better manage your retirement funds and potentially reduce fees while maintaining your new Walgreens automatic enrollment.
What are the default contribution rates and escalation features under SECURE 2.0 automatic enrollment?
SECURE 2.0 requires default contribution rates to be between 3-10% of eligible compensation for automatic enrollment. Plans must also include annual automatic escalation features that increase contribution rates over time, typically by 1% per year up to a maximum of 10-15%. These escalators are designed to improve retirement preparedness and overall financial wellness for participants.
Do existing Walgreens employees need to worry about automatic enrollment changes?
No, the SECURE 2.0 automatic enrollment requirements only apply to newly established plans created on or after December 29, 2022. Existing Walgreens employees in pre-enactment plans are not subject to these new automatic enrollment requirements. However, employers may choose to voluntarily adopt automatic enrollment features for existing plans to improve employee retirement outcomes.
Sources
3. https://meetbeagle.com/resources/post/where-is-my-401-k
4. https://thelink.ascensus.com/articles/2024/10/16/mandatory-automatic-enrollment-under-secure-20