TempoPay is a financial benefits platform that enables employers to remove the financial barriers that prevent their employees from accessing healthcare. The company’s mission is to empower people to access healthcare when they need it, without worrying about affordability concerns. Founded in 2021 by Tim Danison, Erika Davison-Aviles, and Joshua Goldstein, the company was conceptualized, built, and launched from within Redesign Health. 

The Challenge

“Financial barriers shouldn’t prevent people from staying healthy,” says Hattie Ninteau, TempoPay’s Marketing Manager. “But they do today.” 

Hattie knows what she’s talking about: According to a Kaiser Family Foundation study, more than half of U.S. adults said they delayed getting medical attention in the past year due to an affordability concern. Even those who are insured often cannot afford care due to high deductibles, especially when faced with rising inflation. 

For employers, that means more sick days are used, along with a significant loss of productivity.

“Whether or not an employee seeks healthcare impacts their employer,” says Hattie. “It influences both if and how they show up to work.”

TempoPay’s founding team envisioned a solution that would help employees pay for out-of-pocket healthcare expenses—the ones traditional health benefits too often fail to cover. Employees would download a mobile app, register in under two minutes, and instantly get access to a TempoPay card. They could leverage the funds right away to pay for healthcare—unexpected or planned. TempoPay would finance the cost, secured by the individual’s employment. 

It quickly became clear that TempoPay would need a way to write after-tax deductions back to each individual's payroll. Traditionally this burden would fall on the HR administrator, but TempoPay knew that wasn’t an option.

“SFTP and flat file uploads were out of the question,” said Erika Davison-Aviles, Co-Founder & Head of Product, TempoPay. “Manual file uploads are not only time-consuming, they’re wrought with errors. They simply didn’t align with our vision.”

Reducing the burden on employers would be key to getting employees fast access to the care they so desperately needed. 

The Solution

TempoPay’s founding team began to search for a solution that would empower them to build an MVP. They needed to find an API product that could both read vital employment data and write deductions back to each employer’s payroll system. 

This was the only path forward. After all, they wanted to provide a frictionless user experience for everyone. 

“Employers don’t want to jump through hoops to figure out how to deliver benefits to their employees,” said Hattie. “They want simple, set-it-and-forget-it solutions.” 

Through thoughtful research and market analysis, the TempoPay team identified Finch, the unified API for the employment ecosystem, as a potential partner. 

The TempoPay team did their due diligence: They assessed several unified APIs and iPaaS providers. But only Finch offered the ability to both read the employee’s payroll frequency and write deductions back to their payroll system.

“Frankly, there were no other solutions that could support our vision and facilitate writing payroll deductions automatically,” said Erika. “Finch had the technology and functionality that best met our product needs.” 

The Benefits of Using Finch

After becoming a Finch customer, the TempoPay team was thrilled.

“Implementation was straightforward, and the impact was immediate,” said Erika. “Finch's assisted integrations are leagues ahead of the typical batch file process. Instead of waiting a month for new deductions to process, we can make updates every week. That’s lightning speed in our niche.”

In other words, TempoPay can now write payroll deductions over 4X faster. 

The end-user experience exceeded Hattie’s expectations. 

“Employers literally just press a button. It typically takes 30 seconds to onboard through Finch Connect," said Hattie.

As a result, they were able to achieve industry-leading adoption rates.

For Erika, the experience with Finch’s developer success team also stands out. 

“Every time I share product requirements and emphasize the need to move quickly toward a solution, the Finch team delivers. It’s the quintessential case study for agile.”

Together, the TempoPay and Finch teams are testing the limits of how deductions are managed.

“Every time an employee’s card is swiped, a new payment plan is triggered and their deductions change as a result,” said Erika. “For us, that means that every employer, every employee, and every pay period is unique.”

While the initial MVP build took some time, they’ve since enjoyed “months of smooth sailing” while providing healthcare benefit solutions the industry never before thought possible.

Looking forward, the TempoPay team plans to continue innovating. They recently expanded into pet care and veterinary expenses, and are offering more comprehensive employee benefits and financial wellness solutions that give employees access to critical funds when they need it most. 

“We’re growing quickly and Finch has been a fantastic partner throughout our journey, helping us realize our vision of providing financial benefits that meet the needs of the modern-day employee.”

Their customers are eager for the TempoPay team to solve new and related problems. With Finch as a partner, they’re able to fulfill most requests. 

“I’m confident in our growing platform because I know we have Finch as our partner,” said Erika. 

At Finch, we’re excited to partner with game-changing applications like TempoPay. If you’re interested in exploring data integrations, reach out to our sales team or start building with our unified API.

More about TempoPay

TempoPay is available 24/7/365 and employers can bring TempoPay to their company anytime. There’s no need for employees to wait until an enrollment or onboarding period starts. There is no need for credit checks. Employees pay zero fees and no interest. They can choose to repay via payroll deductions or their personal bank account—providing them with a significant degree of flexibility. 

The social impact is profound. Employees can access care when needed, including medications or treatments that their health insurance plan doesn't cover. That’s helpful, for example, when you need to schedule a costly surgery. Or when your doctor prescribes a new medication that costs several hundred dollars to fill.

TempoPay works with each employer to understand their unique employee population. They then make a recommendation regarding an appropriate and responsible spending limit, which usually ranges from $1,500 to $5,000. True to their commitment to flexibility, they can support different benefit configurations such as spending categories and funding options. This enables the team to work creatively with employers seeking a modern financial wellness solution for healthcare expenses and more. 

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Thatch is a health benefits platform designed for the modern era. The company’s mission is to help startups provide their teams with personalized healthcare in under five minutes. Founded in 2021 by Chris Ellis and Adam Stevenson, the company has raised funding from top investors like a16z, General Catalyst, and Google Ventures. 

The Challenge—Building Payroll Integrations, Fast

“The way health benefits work today is very paternalistic,” said Chris Ellis, Co-Founder and CEO of Thatch. “Employers are forced to choose one pair of shoes and hope it fits every member of the team.”

Imagine that, after researching your options and polling your team, you decide to buy Nike runners in a size 10 in bulk. Soon after, someone comes to you and says they need a size 7. Another team member says they’d prefer Reeboks. Yet another employee wants hiking boots. 

Picking a one-size-fits-all health benefits plan can be similarly frustrating for HR professionals and the employees they serve. To save money, employers must purchase group health insurance plans with standardized benefits, which often leaves employees with varying needs unsatisfied. 

Group plans also don’t make it easy for employers. The onboarding and yearly enrollment processes often require them to manually move data between their HRIS, payroll, and benefits administration systems. When a new employee is hired, an existing employee departs, or another qualifying life event occurs, the employer must also manually make changes to the plan.

From the start, Chris and his team were obsessed with delivering an unparalleled customer experience. To build a health benefits platform that provided employees the control and flexibility they deserved, his team would need to leverage technology to deal with any corresponding complexity. “Choosing and managing health benefits is often a thankless job,” said Chris. “We are determined to remove the administrative burden.” In other words, they refused to burden the HR administrator with the tedious task of manually managing employee deductions. After all, these deductions were bound to vary from employee to employee and pay period to pay period.

“Choosing and managing health benefits is often a thankless job. We are determined to remove the administrative burden.”

For example, say all employees have a $500 monthly budget for healthcare. One employee chooses a $350 health insurance plan, leaving them with $150 each month to spend on out-of-pocket medical expenses. In January, they spend $167.25 leading to a $17.25 deduction. But, in February, the employee has no medical expenses, and so doesn’t pay any deduction. 

Without automated deductions management, this data would need to be updated manually—for every employee, every pay period.

Making matters more complicated, every employee is different. Whereas one employee might choose a $350 health insurance plan, another might choose a $700 plan. That individual’s out-of-pocket expenses would be added on top of their monthly $200 deduction. 

“Small businesses want to offer great benefits, but don’t have the bandwidth to deal with complexity,” said Chris. “They just want to know that your solution works and it can deliver the end result they’re looking for.” 

To deliver on this vision, the Thatch team realized they would need to build integrations to each customer’s source of truth for deductions—their payroll system. Chris knew that wouldn’t be an easy feat. 

“With the unbundling of payroll from benefits, we needed to achieve the same level of connectivity, accuracy, fidelity, and timeliness as our customers had become accustomed to,” Chris explained. “And we had to do that without ever being inside the payroll system—and without burdening our customers or their employees.” 

Thatch’s founding team was left with two options: 

1. Invest in building a 1:1 integration with each payroll provider

By Chris’s estimation, in-house development would have meant hiring four additional employees across product, engineering, and business development at a cost of approximately $800,000 per year.

It would have taken at least a year to build the minimum number of integrations they would need to launch. Plus, they would probably have had to go to market with fewer integrations than desired. (After all, there are more than 5,700 payroll providers on the U.S. market, and the top 10 only account for 55% of employers.) In other words, if they chose this route, their near-term total addressable market would be limited.

Complicating matters was the fact that many payroll providers exclusively partner with businesses that already have shared customers. That created a chicken-or-egg problem for Thatch, which had yet to launch let alone acquire a sufficient number of customers to qualify.

2. Find a better way to achieve their goals

From Chris’s perspective, the traditional path presented obstacles that were insurmountable for an early-stage startup. So, his team kicked off a search for a more realistic solution that provided plug-and-play employment integrations. 

The Solution—Finch's Unified Employment API

Beyond needing a faster and more cost-effective way to integrate with the industry’s most popular payroll providers, Thatch wanted a solution that could help their team automate the tedious process of writing deductions back to each employer’s payroll system. 

They soon heard from another founder that they could leverage Finch’s unified employment API to unlock access to over 200 HRIS and payroll systems. 

Chris and his team did their due diligence: They evaluated several competitors, but quickly realized Finch was the only solution that could satisfy their need to both read employee data and write deductions back to each employer’s payroll system. Finch also allowed them to reconcile their ledger, making sure all the dollars and cents added up in a compliant way.

What stood out, though, was the exceptional user experience Finch facilitated. By embedding Finch Connect into their onboarding flow, employers could give Thatch permission to both read and write back to their payroll system in under 30 seconds. 

“Finch’s user interface and security standards met our high quality bar. We were confident that, by leveraging Finch, we’d be able to earn the trust of the employers we served.” 

When it came time to implement Finch, Chris found the setup process to be seamless. As his team navigated its complex use case, the Finch team not only offered unwavering support but also contributed their unique expertise. 

As a result, the Thatch team was also able to provide value-add services its customers never expected. For example, by reading whether an individual was still active within the organization, Thatch was able to notify customers when it came time to offboard employees from its benefits program. 

“Finch is truly a strategic partner,” said Chris. “Together, we’re able to push the envelope on what’s possible. In fact, in the short time we’ve been working together, most or all of our product requests have been implemented.” 

Results—$800K in Savings, 10X More Revenue

By leveraging Finch’s unified API, Chris estimates that his team saved $800,000 in payroll costs, got to market 10 months sooner, and captured 10X more revenue. 

“The benefits of Finch were immediately obvious. We can easily spin up new payroll integrations and unlock new revenue opportunities without adding engineering headcount or building out a business development team.” 

With the time and money the Thatch team saved, they were able to deliver on their commitment to their customers—building a product with a best-in-class user experience. 

“We made a great decision by partnering with Finch,” said Chris. “I can’t imagine building our product any other way.” 

Today, Thatch empowers small businesses to offer their employees personalized healthcare in just five minutes. 

The process is simple for employers: They define a tax-free healthcare budget. Their employees choose a plan that suits their needs and then use any leftover money to pay for out-of-pocket expenses. Individuals can use their Thatch card to purchase anything from therapy sessions to fertility treatments to braces for their children. 

By pooling the resources of many businesses together under the Thatch umbrella, they’re able to offer employers better health insurance plans at lower rates—benefits that are increasingly difficult for startups to access. In other words, Thatch helps small businesses offer big-company benefits.

When asked if he has any advice for the product and engineering leaders who are considering using Finch, Chris had this to say:

“Payroll integration shouldn’t be your core competency. Like Stripe for payments and Plaid for bank accounts, Finch is the best solution in its category. It would take you longer and cost you more to reinvent the wheel."

The wait is finally over. Download the 2023 State of Employment Tech Report for free below.

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In June 2023, Finch surveyed 1,004 HR pros from a variety of industries and company sizes. Our aim was to uncover emerging trends while exploring the relationships between HR pros, their tech stacks, and the employment data they manage. 

Inside, you’ll find powerful insights into the state of employment technology:

• The rate of adoption of generative AI in HR
• The fluid landscape of hiring and return-to-office trends
• The wishlist of HR pros and the surprising item that topped the list
• How companies are approaching data security and regulatory compliance
• And so much more! 

Download the report to discover how HR pros are navigating a tumultuous year, and what they want from the businesses that serve them. 

The payroll ecosystem in the US is fragmented, with over 5,700 providers serving the country alone. Meanwhile, the employment ecosystem has never been more competitive, with best-of-breed applications catering to employers of all types. While both employers and employees stand to benefit from this trend, it also raises the bar for applications in the space to uplevel their customer experience, or risk losing customers. Connectivity to other apps in the ecosystem, especially critical systems such as payroll systems, is a big piece of this customer experience.

We’re thrilled to share our latest whitepaper, The Emergence of the Unified Employment API, which documents the evolution of popular data sync options, from manual entry to flat file transfers to direct integrations to unified APIs to specialized unified APIs such as the unified employment API.

Inside, you’ll learn:

• A brief history and the range of data sync options, including APIs
• Definitions and examples of common types of APIs
• Why employer-facing businesses need vertical-specific unified APIs 
• How companies like Mosaic, Trainual, and PerkUp have benefited
• And so much more! 

Download the whitepaper learn more about the emergence of the unified employment API today!

Finch recognized for achievements in the Unified API space

CB Insights today named Finch to its sixth-annual Fintech 100 ranking (previously the Fintech 250) - showcasing the 100 most promising private fintech companies of 2023.

“Representing 24 different countries across the globe, this year’s Fintech 100 is shaping the future of real-time payments, spend management automation, embedded finance, and more,” said Chris Bendtsen, Lead Fintech Analyst, CB Insights. Together, they are not only increasing the pace of innovation, but launching new products and features to revolutionize the industry as a whole. I cannot wait to see what this cohort accomplishes next.”

“We are pleased to be featured in this list alongside other Finch customers. This ranking is further validation of Finch’s vision to make all applications in the employment ecosystem connected, so employers have the data and insights they need without unsecure and manual data transfers,” said Jeremy Zhang, CEO of Finch. 

Utilizing the CB Insights platform, the research team selected these 100 winners from a pool of over 19,000 private companies, including applicants and nominees. They were chosen based on factors including - including equity funding, investor profiles, business relationships, R&D activity, news sentiment analysis, competitive landscape, proprietary Mosaic scores, and Yardstiq transcripts - and criteria such as tech novelty and market potential. The research team also reviewed thousands of Analyst Briefings submitted by applicants.

Finch is the #1 unified API for employment systems, with industry-leading coverage across 200+ payroll and HRIS providers. Our technology underpins the employment ecosystem, helping employers share organization, pay, and benefits data securely. Finch powers integrations for hundreds of platforms including Brex, Carta, and Betterment.

Quick facts on the 2023 Fintech 100: 

• Equity funding and deals: The Fintech 100 includes a mix of companies at different stages of maturity, product development, and funding. The cohort has raised nearly $22B in equity funding across 381 deals since 2019.
• Unicorns: There are 31 companies with $1B+ valuations on the list.
• Global Reach: This year’s winners represent 24 different countries across the globe. Forty-three percent of the selected companies are headquartered in the US. The UK comes in second with 12 winners, followed by Singapore with 7. Additionally, some emerging markets stand out with multiple winners this year. For example, India has 3 winners, while Indonesia and Egypt each have 2.

About CB Insights
CB Insights builds software that enables the world's best companies to discover, understand, and make technology decisions with confidence. By marrying data, expert insights, and work management tools, clients manage their end-to-end technology decision-making process on CB Insights. To learn more, please visit www.cbinsights.com.

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Contact:
chris.orlando@cbinsights.com

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Sign up here to be the first to receive the full report once it's published in October 2023:

Recently, Finch commissioned a survey exploring the relationship human resources (HR) professionals have with their tech stacks, specifically the employment systems they use to manage employee data. To get a clear picture of the industry, the survey polled 1,004 HR professionals throughout the United States. The full report will be published in October but, in the meantime, here’s a sneak peek into some of the findings. 

Note: Our team defines employment systems as tools that store data centered around the employee lifecycle. Examples of employment systems include but are not limited to Human Resource Information Systems (HRIS), payroll, benefits, business finance, tax, compliance, and insurance applications.

The Growing Tech Stack: Making the Case for More Connected Systems

In the survey, we found that 49% of HR professionals say they leverage seven or more employment systems of record, inclusive of their HRIS, ATS, benefits administration, payroll, and time-tracking systems. This becomes more complex with larger organizations: 38% of HR professionals whose organizations have more than 1,000 employees report having ten or more employment systems in their tech stack.

While nearly all respondents (97%) say it's important for their employment systems of record to integrate with other tools in their tech stacks, 84% say this connectivity is very or extremely important. Yet, 55% of HR professionals say that between one and six of their tools automatically sync employment data from their systems of record. 

With so many disparate and siloed tools to manage, there’s a strong need for greater connectivity throughout the employment ecosystem. For HR professionals, better system integrations will be the key to boosting efficiency, enabling them to do their jobs more effectively and with more ease.

Wasted Time and Errors Found

Our survey found that 58% of HR professionals spend more than seven hours in employment systems each week. 68% say they regularly or constantly switch between different employment systems throughout the day. 51% of those who toggle between different employment systems admit doing so leaves them feeling overwhelmed, stressed, annoyed, frustrated, or angry.

Interestingly, HR executives spend more time in their employment systems than their workers. Whereas 72% of VP- and C-level leaders say they spend seven or more hours logged in, just 46% of individual contributors say the same. Surprisingly, executives also report spending more time manually entering employment data and toggling between different systems than the individual contributors who work for them.

Not as surprising, 64% of HR professionals say they spend between four to nine hours manually entering data per week. This is somewhat expected and unfortunately accepted in the HR industry given the highly-sensitive nature of information that needs to be inserted into these employment systems. However, these manual processes clearly aren’t meeting the mark when it comes to accuracy: 56% of HR professionals say their team finds incorrect or outdated information in employee data at least once a week.

This data tells us that there’s a huge opportunity to improve the many employment systems that HR professionals have to manually enter data into. 

Security Issues Come From the Top

On the topic of entering data into employment systems, we decided to see how securely HR professionals gather and manage sensitive employment data. We found that the top two channels HR professionals currently use to communicate sensitive employment data are email (65%) and video conferencing tools, such as Zoom or Google Meet (51%).

Shockingly, 41% of HR professionals admit they communicate sensitive employment data via text message or SMS. Findings further reveal the biggest offenders are those who should know better: 50% of HR professionals with Chief Human Resource Officer, VP of HR or Head of HR titles admit to communicating sensitive employment data through text message or SMS. 

While most respondents (68%) admit they’re worried about employment data breaches, a greater percentage (76%) is concerned about complying with data security regulations, with 57% of HR professionals saying they are very or extremely concerned. 70% of those in executive roles such as CHRO, VP or Head of HR say they’re very or extremely concerned about complying with employment data security regulations. In comparison, fewer of those in individual contributor HR roles (39%) express the same high levels of concern about complying with employment data security regulations.

The takeaway is clear: HR professionals need to find a more secure way to share employment data. 

Conflicting Views on AI

With nearly three in five HR professionals already utilizing generative AI technologies, there is a decidedly large awareness of AI’s potential within the human resources field. Yet, notably, there’s a significant disconnect between HR executives and individual contributors when it comes to whether AI technology is actually being used on a regular basis: The vast majority (84%) of HR executives at the VP level or higher (e.g., Head of HR, CHRO, etc.) believe their teams are using generative AI, yet only 34% of individual contributors report doing so.

Meanwhile, views around the impact and implications of AI tools continue to be mixed. While a majority of HR professionals rate artificial intelligence as being both relatively powerful and a competitive advantage, many still perceive AI as being relatively expensive, exclusive, and risky to use. There is also a great deal of fear about the potential of the human resources occupation being outsourced to AI, as indicated in numerous open-ended responses. Yet, where AI takes the HR field going forward remains to be seen.

What’s To Come?

Finch will be announcing the full results of this survey in October, which will include in-depth breakouts of the above data. Interested in seeing the full report once it’s published? Sign up below to be notified.

This survey was conducted online within the United States from June 21 - 30, 2023 among 1,004 human resources professionals, all of whom were employed full-time. 

The vast majority (78%) were team leaders in director, vice president, or c-level executive roles. The other 22% were individual contributors, many of whom specialized in a specific domain within human resources, such as people operations, talent acquisition, or DEI. 

Surprisingly, 63% of respondents were neither remote nor hybrid workers, instead being required to come into the office five days per week.

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Product and engineering leaders who create products that connect to HRIS and payroll providers are faced with an ever-increasing array of options when it comes to their integrations strategy:

• Let customers connect via “old school” SFTP methods
• Build direct integrations
• Use a general / legacy iPaaS unified API provider
• Select a specialized unified API provider for the employment space

Download our new buyer’s guide to learn more about the pros and cons of these options and much more.

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Inside, you’ll find answers to the most common questions buyers ask when evaluating whether to invest in a unified API:

• What are unified APIs, and what problems do they solve?
• What types of unified APIs will we find on the market today?
• What buying criteria should we keep in mind when planning a purchase?
• What steps should we follow to find a solution that meets our company’s needs?

‍Download the guide to get the information you need to make an informed decision, then reach out to our sales team with any follow-up questions.

How to Prepare for Section 603 of SECURE Act 2.0

Have you been paying close attention to the SECURE Act 2.0? If so, you know that Congress has written new laws to expand retirement plan coverage for millions of Americans. While certain sections of SECURE Act 2.0 are already in effect, Section 603—along with many others—will take effect on January 1, 2024. 

This means that 401(k) and 403(b) plan providers and product leaders have a tight turnaround to stay compliant. It’s a race against time, but with proper planning, you can beat the clock. In this post, we break down Section 603 of SECURE Act 2.0 and the steps 401(k) and 403(b) plan providers should take to ensure compliance by the fast-approaching deadline. 

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Breaking down Section 603

The United States is facing a retirement crisis. Across all age groups, the average American has only $89,300 set aside for retirement. When you consider that the benchmark set by popular savings strategies like the 4% rule is $1.5 million, there’s due cause for concern.

To curb this trend and help more people prepare for retirement, Congress is updating the catch-up contribution rules in Section 603 of SECURE Act 2.0. 

Under current law, retirement plan participants age 50 and older can make catch-up contributions to their 401(k), 403(b), or IRAs—but under Section 603, that’s about to change. According to Section 603, if a retirement plan participant wants to make a catch-up contribution—and they earn more than $145,000 per year—they will be required to make the contribution on a Roth tax basis. In other words, catch-up contributions for these individuals will no longer be eligible for pre-tax treatment in 2024.

The purpose of the provision is to create more opportunities for Americans to accelerate their savings in the years leading up to retirement. By imposing a Roth-based rule, Congress ensures that plan participants will be able to withdraw tax-free dollars when they retire, thereby strengthening their financial security. 

While a glitch in Section 603 could inadvertently eliminate the ability for anyone to make catch-up contributions in 2024, Congress has told the U.S. Treasury that corrections are coming, so retirement plan providers should prepare to stay compliant with Section 603 as Congress intended.

Section 603: Questions to ask yourself right now

Section 603 is effective beginning January 1, 2024, which means that 401(k) and 403(b) providers must be prepared to update policies for every single retirement plan participant age 50 or older who is making catch-up contributions and earns over $145,000. To ensure you are ready for the new requirements, here are some questions you should be asking yourself right now:

1. How do I identify which of my plan participants are currently subject to Section 603 regulations, and how many of these plan participants am I responsible for? Hundreds? Thousands? More?
2. How do I identify when participants become newly eligible (i.e., when they reach their 50th birthday and/or if they begin earning more than $145,000)?
3. Do I have the technology in place to automate all of these contributions updates and manage them on an ongoing basis?
4. Is my team capable of updating every single retirement plan in just six months? 

If you can’t keep up with Section 603, you risk noncompliance, which could result in harsh penalties, steep fines, or legal fees associated with disputing any penalties in court.

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How to prepare for Section 603 of SECURE 2.0

If you determine that you are among the plan providers affected by Section 603, here’s what you can do to stay prepared:

1. Study up on Section 603 and learn as much as you can about the legislation. To help yourself, your team, and your customers understand what’s happening, remember the provision’s key points in simple terms:

• If a plan participant 50 or older makes more than $145,000 per year and wishes to make a catch-up contribution, they must do so on a Roth basis. 
• If other eligible employees wish to make catch-up contributions on either a pre-tax or Roth basis, they are permitted to do so. 
• All retirement plans must be modified to reflect these updates by January 1, 2024.

1. Get ready to transfer data. To prepare for Section 603, you’ll need to pull in data from payroll systems to:

• Determine which participants are 50 or older and earned over $145,000 in the 2023 tax year 
• Identify whether they are making catch-up contributions
• Verify those contributions are made on a Roth basis.

3. Monitor the situation. It’s unlikely, but Congress could delay the provision or the IRS could extend compliance due dates to January 1, 2026. Nevertheless, preparing for Section 603 should be mission critical at your organization, so you don’t fall behind.

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Updating the data

Naturally, updating contributions means you’ll have to exchange large volumes of data between you and plan providers. Since you need to look at every plan participant who is 50 or older and earns more than $145,000 per year, you’ll need to pull in data from HRIS and payroll systems, such as:

1. Participant Information: Each participant's full name, Social Security number, and contact information is necessary to identify and locate the individual's retirement plan account.
2. Income Verification: Documentation or records are needed to confirm that the participant's gross income exceeds the threshold of $145,000 per year. 
3. Account Balance: Checking the current balance of the participant's retirement account(s) helps determine the available funds for transferring catch-up contributions to a Roth basis.
4. Catch-Up Contribution Eligibility: Each participants’ date of birth is needed to confirm whether they are age 50 or older. This is crucial since catch-up contributions are only available to participants who have reached the age threshold.
5. Job Change and Contribution Allocation: If a participant changes jobs mid-year, they may have contributed to retirement plans at both employers. Since each employer's retirement plan would have its own account for the participant, you need to consider the contributions made at each employer and ensure that the catch-up contributions are correctly allocated and characterized as Roth contributions.
6. Allocation Details: Information about the participant's investment allocation within the retirement account, including the percentages or amounts invested in different asset classes or specific funds, helps ensure that the updated contributions align with the participant's desired investment strategy.

While this data can vary based on your current retirement plan, platform, or procedures in place, it should give you an idea of how complex the compliance process can be. Now that you know the different types of data, how will you transfer all of it?

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Transferring the data

When you’re updating retirement plans to stay compliant with Section 603 of SECURE Act 2.0, there are four ways to transfer data: 

1. Entering data manually 

Manual data entry is the least expensive option in terms of upfront costs, but it puts undue burden on sponsor administrators and is prone to errors. Improperly tracking data could result in a failure to update retirement plans and expose you to Section 603 compliance regulations. Manual data entry is simply unreliable, time-consuming, and expensive. 

2. Transferring data via SFTP files or flat files

Transferring SFTP and flat files could be easier than asking in-house developers to build custom, direct integrations—but transferring all of that sensitive retirement plan data has several drawbacks:

• Sponsor admins are forced to compose custom reports and upload them correctly.
• Manual data entry raises risks and requires validation to avoid errors.
• This method does not allow for real-time data access.
• Excessive data syncs slow down the compliance process for retirement plan providers and plan sponsors.

3. Building your own custom integrations

Custom integrations with HRIS and payroll systems offer the advantages of automatic, real-time data syncs, as well as read and write capabilities. However, they are also complex and expensive to build and maintain. Challenges of building custom integrations include:

• Number of systems: Did you know that there are more than 5,700 HRIS and payroll systems in the U.S. market? To serve every customer, your team would need to build custom integrations for hundreds of different systems, which could take months and cost hundreds of thousands of dollars. 
• Technical complexity: Building custom integrations is technical, complex, and difficult to achieve. Only experienced engineers with a strong understanding of both HRIS and payroll systems are capable of building the most effective custom integrations. 
• Cost: Custom integrations are not a cost-effective option for retirement plan providers. The soft costs of building a single integration can be as high as $200,000, and the hard costs, such as API fees, can add up quickly. Ultimately, custom integrations are a time-consuming and expensive undertaking. 

4. Leveraging the power of unified employment APIs

Unified employment APIs combine the advantages of custom integrations with the simplicity and cost-effectiveness of off-the-shelf software. How do they work? A unified employment API aggregates connectivity to hundreds of HRIS and payroll systems—automatically, instantly, and with a single integration. This means that you can get all of the benefits of custom integrations without having to build and maintain them yourself.

Specific to Section 603, unified employment APIs can help you:

• Pinpoint which participants are 50 or older and make more than $145,000 per year
• Limit these participants to Roth catch-up contributions in 2024
• Automate their catch-up contributions per pay run
• Automate recordkeeping to stay compliant
• Monitor participant ages and income to repeat the process in real time
• Identify when a participant switches jobs in the middle of the year
• Confirm a participant’s $145,000 salary from multiple payroll providers

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What are the detailed pros and cons of buying a unified employment API versus building integrations in-house? Find out here. 

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A Section 603 implementation plan for 401(k) and 403(b) providers

Remember, time is a crucial factor. To ensure you have a solution in place to comply with Section 603 by the deadline of January 1, 2024, we recommend:

• Evaluating your data transfer options and making a decision as soon as possible
• Implementing a solution no later than August 31, 2023
• Validating and testing your solution in September
• Rolling out your solution to all users in October
• Monitoring performance for complete and compliant functionality through the end of the year

With this implementation plan in place, you’ll be able to make the necessary adjustments before January 1, 2024.

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Here's how Finch can help

‍Finch is a unified employment API that integrates with 200+ HRIS and payroll systems, allowing retirement plan providers to transfer critical data quickly and responsibly. With real-time access to employment data, retirement plan providers can automate contribution management and push changes directly to payroll.

The benefits of using Finch include:

• Speed to market: Finch is a pre-built solution that's ready to use. There's no need to build and maintain custom integrations, so you can launch integrations fast.
• Automated enrollment and contribution management: Finch provides real-time read-and-write access to HRIS and payroll systems, so you can automate contribution management with ease. This reduces the risk of errors and saves sponsor admins time in the process. 
• Stronger security: Finch is a pass-through system, which means that it does not store any sensitive data. This reduces the risk of data breaches and compliance violations.
• Confident compliance: Finch lets you set predefined rules and algorithms for retirement plan data—such as age and income—so you can check for compliance with contribution limits and eligibility criteria. You can also flag any non-compliant data for further review and action.
• Strong security: Finch uses industry-standard security measures to protect data privacy and security.

As you keep close tabs on Section 603, understand that time is short and compliance is critical. With a unified employment API like Finch, you can automate all the necessary updates and stay compliant.

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Talk to sales

Talk to our sales team today to explore ways you can use Finch to ensure compliance with Section 603 of SECURE Act 2.0 and improve your customer experience overall.

In December 2022, Congress passed the SECURE Act 2.0, which builds on retirement savings regulations set forth by the original SECURE Act of 2019. Written to expand coverage and increase retirement savings for millions of Americans, SECURE Act 2.0 introduces some major changes to retirement plans nationwide. 

Since certain sections of SECURE Act 2.0 are already in effect—and even more will go into effect soon—retirement plan providers must act swiftly to ensure compliance. In this post, we offer an overview of Section 125, the part-time employees clause, then compare four methods for becoming compliant, and finally recommend a timeline for fulfilling your obligations. 

What is SECURE Act 2.0, and why was it enacted?

SECURE stands for Setting Every Community Up for Retirement Enhancement. Now in its second iteration, SECURE Act 2.0 is designed to help employers provide easier and more affordable retirement plans for their employees.

While some Americans are finding ways to save, the nation’s collective fear of not having enough money to retire is valid: The average retirement savings in the United States is only $65,000. 

To address this concern and unburden the American worker, SECURE 2.0 is creating more accessible opportunities to save for retirement. 

What is Section 125? The part-time employees clause

Signed into law in 2019, the SECURE Act mandates that employers allow long-term, part-time employees to participate in their 401(k) plans. The original legislation dictates that employees must have worked at least 1,000 hours in their first year or accumulated a minimum of 500 hours of service over three consecutive years.

SECURE Act 2.0, which passed in 2022, reduces the three-year rule to two years. It also stipulates that long-term, part-time employees must also be allowed to participate in 403(b) plans that are subject to ERISA. 

The new provisions under Section 125 are effective for any plan starting after December 31, 2024, which means that 401(k) and 403(b) providers must soon put in place and test the technology they will need to automatically enroll long-term, part-time workers. 

Failure to do so correctly and on time could result in stiff fines as well as the legal fees associated with disputing any penalties in court.

How 401(k) and 403(b) providers should prepare for Section 125

If you’re among the retirement plan providers affected by Section 125, your first step to preparing is to understand the legislation inside and out. Once you are confident that you know what is required of you, you need to determine how you are going to identify part-time employees, track how many hours they’ve worked, over what period, and auto-enroll those who qualify, as stipulated by Section 101.

By nature, this provision necessitates the regular sharing of large volumes of data between you and the employers who sponsor your plans, including sensitive personal identifiable information (PII) and payroll details for every participant. To transfer this data, which is largely stored in employers’ payroll systems and human resources information systems (HRIS), you can implement one of four approaches—some more seamless and effective than others:

1. Manual data entry

Manual data entry has its benefits. It allows plan sponsors to stick with a data collection system that works for them, and it is almost always the least expensive option in terms of hard, upfront costs. That said, the potential downfall from manual data entry cannot be understated:

• Manual data entry is prone to errors, which can lead to improperly tracked data, Section 125 compliance violations, and penalties from regulatory bodies.
• It can also lead to inaccurate retirement plan balances and contributions, resulting in penalties from the IRS.
• Manual data entry does not adequately protect PII, such as Social Security numbers and bank account information. Without safeguarding highly sensitive data, you run the risk of exposing employees to data breaches and potential identity fraud. 
• Manual data entry puts undue burden on sponsor admins, as it requires hours of their time and attention every month that could be spent on higher-value tasks.

2. SFTP or flat files

Secure file transfer protocol (SFTP) and flat files offer another way to transfer retirement plan data. 

With SFTP, you can bulk transfer large files of data in tables (in the form of CSV, JSON, and XML files, for example) over a secure network. The benefits of SFTP methods are that they’re generally easier for most in-house developers to build compared to custom, direct integrations (more on those next). But there are also significant drawbacks:

• SFTP requires sponsor admins to compose custom reports for each data sync and upload them correctly. This often presents technical challenges for your customers, who may be responsible for inputting host domains, keys, and other server-specific information into their system to establish a scheduled sync. 
• SFTP relies on manual data entry to a certain extent, which raises risks and means data has to be validated to avoid errors—a process that drains time and resources for all parties.
• SFTP doesn’t allow for real-time data access, preventing you from delivering the seamless, next-generation functionality business customers are looking for in their technology solutions.

This method is especially cumbersome when data syncs need to happen often, which will be the case for plan providers and plan sponsors who must comply with auto-enrollment and auto-contribution increase requirements.

3. Custom integrations

A more sophisticated approach involves direct integrations with the HRIS and payroll systems that house the data you need to perform auto-enrollment and auto-contribution increase functions. 

The beauty of direct integrations is that data syncs happen automatically and in real time, driving efficiencies for all parties, providing your customers with an optimally seamless experience, and giving you the peace of mind that you are always in compliance with Section 101. 

Crucially, custom integrations can be built to provide read and write capabilities, which means you can also use them to automatically push changes back to HRIS and payroll systems. This is especially valuable when it comes to contribution management. 

Custom integrations also present significant challenges: 

• There are more than 5,700 HRIS and payroll systems in the U.S. market. To adequately cover your customer base, you will need to build custom integrations to at least hundreds of them.
• Building custom integrations in-house is technically complex and requires specialized engineering skills and experience.
• They are also expensive to build and maintain, both in terms of time and money. If you assume that three engineers will work on a single custom integration for three months, that puts the soft costs of just your initial buildout in the ballpark of $200,000. Then, there are the hard, ongoing costs to consider, like the fees many HRIS and payroll systems charge to use their API. For access to a legacy system like ADP, the hard and soft costs combined can run in excess of $1 million.

4. Unified employment APIs

To get all of the advantages of custom integrations without the cost or hassle of building them in-house, you can turn to a unified employment API, which aggregates connectivity to many HRIS and payroll systems at once with a single integration. A unified employment API does the hard work of building and maintaining the integrations, and standardizing and abstracting all incoming data, so your team doesn’t have to. They are infinitely more efficient than custom integrations, so you can get to market faster and, ultimately, at less cost.

Learn more about the advantages and disadvantages of buying a unified employment API versus building integrations in-house.

A Section 125 implementation plan for retirement providers

To ensure you have a solution in place to comply with Section 125 by the deadline, we recommend:

• Evaluating your options and making a decision by July 30, 2023
• Implementing a solution no later than September 30, 2023 (keeping in mind that some solutions take much longer to implement than others)
• Spending the rest of the year validating and testing your solution internally
• Rolling out your solution to all users in 2024 and monitoring performance for complete and compliant functionality. This will give you time to make any required adjustments before December 31, 2024.

The bottom line: Becoming compliant takes time

As you prepare for SECURE Act 2.0 to come into effect, don’t lose sight of the fact that it will take time to prepare to be compliant with Section 125. The least risky way to ensure compliance—not to mention the most time- and cost-effective solution—is to integrate with a unified employment API like Finch.

Finch does the hard work of integrating with HRIS and payroll providers to facilitate the secure, permissioned flow of critical business data. Our dynamic, unified employment API offers:

• Easy integration: Finch makes it easy for retirement plan providers to integrate with 200+ HRIS and payroll systems, covering approximately 88% of the market. 
• Automated enrollment and contribution management: With Finch, retirement plan providers instantly access the real-time employee directory and payroll data they need to automate 401(k) and 403(b) enrollment, and push contribution changes directly to payroll—no manual intervention needed.
• Increased efficiency: Finch is a pre-built solution that’s ready to use. Plan providers waste no time building and maintaining custom integrations, and plan sponsors save dozens of admin hours a month—a win-win for you and your customers.
• Confident compliance: Finch replaces error-prone manual processes with seamless integrations that let retirement plan providers meet the stipulations in Section 125 of SECURE Act 2.0.
• Strong security: Finch is a pass-through system, and is SOC2 Type 2, CCPA, and GDPR compliant.

Talk to our sales team today to explore ways you can use Finch to ensure compliance with Section 125 of SECURE 2.0 and improve your customer experience overall.

In December 2022, Congress passed the SECURE Act 2.0, which builds on retirement savings regulations set forth by the original SECURE Act of 2019. Written to expand coverage and increase retirement savings for millions of Americans, SECURE Act 2.0 introduces some major changes to retirement plans nationwide. Since certain sections of SECURE Act 2.0 are already in effect—and even more will go into effect soon—retirement plan providers must act swiftly to ensure compliance. 

In this post, we’ll cover what SECURE Act 2.0 is, why it was enacted, and a timeline detailing the provisions that go into effect by the end of 2023. 

NEW! Download the Comprehensive How to Prepare for SECURE Act 2.0 whitepaper today

What is SECURE Act 2.0?

SECURE stands for Setting Every Community Up for Retirement Enhancement. Now in its second iteration, SECURE Act 2.0 is designed to help employers provide easier and more affordable retirement plans for their employees. 

While there are dozens of new rules and regulations to consider, here is a snapshot of provisions most pertinent to 401(k) and 403(b) plan providers:

• Automatic enrollment and contribution increases: All new 401(k) and 403(b) plans adopted after December 29, 2022 (with a few exceptions that we will discuss later in this post) will be required to automatically enroll participants at a rate of at least 3% of their pay but not more than 10%. They will also be required to automatically increase participants’ contributions 1% every year thereafter until they reach at least 10% but not more than 15%. 
• Increased catch-up contributions: The catch-up contribution limit for 401(k) and 403(b) plans will increase from $6,500 to $7,500 for Americans aged 50 and up. Since nearly half of Americans over the age of 55 have no retirement savings, this provision will help older employees contribute more to their plans as they near retirement. 
• Roth 401(k) expansion: The availability of Roth 401(k) plans will expand to all employers, regardless of size. With its embedded tax benefits, this provision will help small businesses, which have been historically less likely to sponsor a retirement plan, to offer a plan to their employees.
• Emergency withdrawals: To cover unforeseeable or immediate financial needs, plan participants can now withdraw up to $1,000 from their retirement plan without having to pay a 10% tax. With easier access to their retirement savings, Americans will be better able to weather a financial emergency.
• Saver's Credit: Saver's Credit, the tax break for low- and moderate-income workers, will be fixed at 50%. The qualifying income for eligible savers will also increase from $41,000 to $41,500.

Why was the SECURE Act 2.0 enacted?

According to a 2021 report by the National Institute on Retirement Security, 

• More than two-thirds of Americans say the U.S. is facing a retirement crisis.
• More than half are concerned about achieving financial security in retirement.
• Nearly two-thirds expect to work past the normal retirement age for financial security. 

While some Americans are finding ways to save, the nation’s collective fear of not having enough money to retire is valid: the average retirement savings in the United States is only $65,000. 

To address these concerns and unburden the American worker, SECURE 2.0 is creating easier, more accessible opportunities to save for retirement. 

Let’s take a look at some of the provisions that go into effect at the end of the year. 

A SECURE Act 2.0 Timeline: The provisions going into effect by the end of 2023

While many of the rules and regulations set forth by SECURE 2.0 took effect on the day the legislation was signed, deadlines for others are quickly approaching. It’s a race against time to stay compliant, and retirement plan providers would be smart to start preparing now.

Here’s a complete breakdown of every SECURE 2.0 provision that will take effect by January 1, 2024. 

Section 108: Indexing IRA catch-up limit

Section 108 increases the limit on IRA contributions by $1,000 (not indexed) for individuals aged 50 and older. Section 108 is effective for taxable years beginning after December 31, 2023.

Section 110: Treatment of student loan payments as elective deferrals for purposes of matching contributions

Section 110 allows employers to treat qualified student loan payments (QSLPs) as elective deferrals for the purposes of matching contributions. This means that employers can make matching contributions to employees' retirement accounts based on the amount of money that employees pay toward their student loans.

Section 110 is effective for contributions made for plan years beginning after December 31, 2023.

Section 115: Withdrawals for certain emergency expenses

Section 115 allows participants in retirement plans to make penalty-free withdrawals for emergency expenses. To be eligible, the expense must be an unforeseen or immediate financial need relating to necessary personal or family emergency expenses. Participants can withdraw up to $1,000 per year from their retirement plan for a qualified emergency expense. The withdrawal must be repaid within three years. If the withdrawal is not repaid within three years, the participant will be subject to a 10% penalty tax.

Section 115 is effective for distributions made after December 31, 2023.

Section 116: Allow additional nonelective contributions to SIMPLE plans

Section 116 says that employers with SIMPLE plans must contribute 2% of employee compensation or 3% of employee elective deferral contributions. Employers are allowed to make additional contributions up to 10% of compensation or $5,000, whichever is less.

Section 116 is effective for taxable years beginning after December 31, 2023.

Section 117: Contribution limit for SIMPLE plans

Under current law, the annual contribution limit for a SIMPLE IRA is $14,000. For employers with 25 or fewer employees, Section 117 increases the contribution limit by 10% in the first year of implementation. Employers with 26 to 100 employees can offer higher contribution limits if they provide a 4% matching contribution or a 3% employer contribution. 

Section 117 is effective for taxable years beginning after December 31, 2023. 

Section 121: Starter 401(k) plans for employers with no retirement plan

Section 121 allows employers without a retirement plan to offer a starter 401(k) plan. Employees are automatically enrolled at 3 to 15% of their salary, with a $6,000 annual contribution limit and a $1,000 catch-up contribution for those over 50. 

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

Section 126: Special rules for certain distributions from long-term qualified tuition programs to Roth IRAs

Section 126 allows 529 plan holders to transfer up to $35,000 to a Roth IRA, tax- and penalty-free, if the 529 account has been open for more than 15 years. 

Section 126 is effective with respect to distributions after December 31, 2023.

Section 304: Updating dollar limit for mandatory distributions

Under current law, employers can transfer former employees' retirement accounts from a workplace retirement plan into an IRA if the balance is between $1,000 and $5,000. Section 304 increases this limit to $7,000. 

Section 304 is effective for distributions made after December 31, 2023.

Section 310: Application of top-heavy rules to defined contribution plans covering excludable employees

Under current law, qualified retirement plans must pass the top-heavy test. Section 310 allows employers to perform the top-heavy test separately on non-excludable and excludable employees. This removes the financial incentive to exclude employees from the 401(k) plan, increasing retirement plan coverage to more workers.

Section 310 is effective for plan years beginning after December 31, 2023.

Section 314: Penalty-free withdrawal from retirement plans for individual cases of domestic abuse

Section 314 allows domestic abuse survivors to withdraw up to $10,000 from their retirement plans without penalty. Participants can repay the money over three years, and they will be refunded for taxes paid on any repaid amounts.

Section 314 is effective for distributions made after December 31, 2023.

Section 315: Reform of family attribution rule

Section 315 updates two stock attribution rules. The first update removes the inequity between spouses in both community property and separate property states. The second update modifies the attribution of stock between parents and minor children.

Section 315 is effective for plan years beginning after December 31, 2023.

Section 316: Amendments to increase benefit accruals under plan for previous plan year allowed until employer tax return due date

Under current law, employers can amend retirement plans only in the year in which the plan was effected. Section 316 allows employers to amend retirement plans by the due date of their tax return.

Section 316 is effective for plan years beginning after December 31, 2023.

Section 323: Clarification of substantially equal periodic payment rule

Section 323 ensures that the 10% early withdrawal penalty does not apply to substantially equal periodic payments (SEPPs) from retirement accounts, even if the account is rolled over, exchanged, or converted to an annuity.

Section 323 is effective after December 31, 2023.

Section 325: Roth plan distribution rules

Under current law, required minimum distributions (RMDs) are not required for Roth IRAs until after the owner dies. However, RMDs are required for Roth accounts in employer retirement plans, such as 401(k) plans, while the owner is still alive. Section 325 eliminates the RMD requirement for Roth accounts in employer plans. This means that owners of Roth accounts in employer plans will no longer have to take RMDs while they are still alive.

Section 325 is effective for taxable years beginning after December 31, 2023.

Section 327: Surviving spouse election to be treated as employee

Section 327 allows a surviving spouse to elect to be treated as the deceased employee for required minimum distribution (RMD) purposes. This means that the surviving spouse can take RMDs based on the deceased employee's age, rather than their own. 

Section 327 is effective for calendar years beginning after December 31, 2023.

Section 332: Employers allowed to replace SIMPLE retirement accounts with safe harbor 401(k) plans during a year

Section 332 allows an employer to replace a SIMPLE IRA plan with a SIMPLE 401(k) plan or other 401(k) plan that requires mandatory employer contributions.

Section 332 is effective for plan years beginning after December 31, 2023.

Section 343: Defined benefit annual funding notices

Section 343 aims to define benefit pension plan funding issues more clearly on a plan’s annual funding notice. 

Section 343 is effective for plan years beginning after December 31, 2023.

Section 350: Safe harbor for corrections of employee elective deferral failures

Section 350 extends the safe harbor for correcting errors in automatic enrollment and automatic escalation features in retirement plans. Employers have nine and a half months after the end of the plan year to correct errors without penalty.

Section 350 is effective for errors after December 31, 2023.

Section 602: Hardship withdrawal rules for 403(b) plans

Under current law, 401(k) and 403(b) plans have different hardship distribution rules. 401(k) plans allow for all amounts to be distributed, while 403(b) plans only allow for employee contributions to be distributed. Section 602 conforms the 403(b) rules to the 401(k) rules.

Section 602 is effective for plan years beginning after December 31, 2023.

Section 603: Elective deferrals generally limited to regular contribution limit

Under current law, catch-up contributions can be made on a pre-tax or Roth basis. Section 603 requires all catch-up contributions to be made on a Roth tax basis, except for employees with compensation of $145,000 or less.

Section 603 is effective for taxable years beginning after December 31, 2023.

Learn what’s required to become compliant today

As you prepare for SECURE Act 2.0 to come into effect, don’t lose sight of the fact that it will take time to prepare to be compliant. 

You can get started today by reading our overview of Section 101, the automatic enrollment and increases clause. In this post, you’ll discover four methods for becoming compliant as well as a recommended timeline for fulfilling your obligations. 

In the coming days, we’ll dive into Sections 125 and 603 in greater depth, offering insight into what your obligations are and how you can become compliant before the relevant deadlines. Stay tuned!

How to Prepare for Section 101 of Secure Act 2.0: An Implementation Plan

In December 2022, Congress passed the SECURE Act 2.0, which builds on retirement savings regulations set forth by the original SECURE Act of 2019. Written to expand coverage and increase retirement savings for millions of Americans, SECURE Act 2.0 introduces some major changes to retirement plans nationwide. 

Since certain sections of SECURE Act 2.0 are already in effect—and even more will go into effect soon—retirement plan providers must act swiftly to ensure compliance. In this post, we offer an overview of Section 101, the automatic enrollment and increases clause, then compare four methods for becoming compliant, and finally recommend a timeline for fulfilling your obligations. 

What is SECURE Act 2.0, and why was it enacted?

SECURE stands for Setting Every Community Up for Retirement Enhancement. Now in its second iteration, SECURE Act 2.0 is designed to help employers provide easier and more affordable retirement plans for their employees. 

While some Americans are finding ways to save, the nation’s collective fear of not having enough money to retire is valid: The average retirement savings in the United States is only $65,000. 

To address this concern and unburden the American worker, SECURE 2.0 is creating more accessible opportunities to save for retirement. 

What is Section 101? The automatic enrollment and increases clause

One of the primary reasons so few Americans have sufficient retirement savings is because, even when employers do sponsor plans, many employees don't take the steps necessary to enroll. To address this problem, Section 101 of SECURE 2.0 requires all new employer-sponsored 401(k) and 403(b) plans adopted after December 29, 2022, to automatically enroll employees at an amount equal to at least 3% of the employee’s pay but not more than 10%.

Of course, Section 101 stipulates that employees have the right to opt out of participation, but the small friction of doing so is usually enough to keep many employees enrolled. In fact, studies demonstrate that automatic enrollment increases employee participation across the board, particularly among Black, Latinx, and lower-wage employees. Additionally, Fidelity Investments found that, among its clients, 90% of auto-enrolled employees stay enrolled in their plans.

In addition to auto-enrollment, Section 101 requires that each participant's contribution amount be automatically increased by 1% each year until it reaches at least 10%, but not more than 15%. The legislation does allow exceptions to both of these requirements for small businesses with 10 or fewer employees, new businesses that have been operating for less than three years, church plans, and governmental plans, but most 401(k) and 403(b) plan providers should anticipate that most of their new plans will ultimately be affected. 

Section 101 is effective beginning January 1, 2025, which means that 401(k) and 403(b) providers must soon put in place and test the technology they will need to automatically enroll and increase the contributions of millions of participants. Failure to do so correctly and on time could result in noncompliance, stiff fines, and legal fees associated with disputing any penalties in court.

How 401(k) and 403(b) providers should prepare for Section 101

If you are among the plan providers affected by Section 101, your first step to preparing is to understand the legislation inside and out. Once you are confident that you know what is required of you, you need to determine how you are going to auto-enroll participants in the years ahead. 

By nature, auto-enrollment and contribution increases necessitate the regular sharing of large volumes of data between you and the employers who sponsor your plans, including sensitive personal identifiable information (PII) and payroll details for every participant. To transfer this data, which is largely stored in employers’ payroll systems and human resources information systems (HRIS), you can implement one of four approaches—some more seamless and effective than others:

1. Manual data entry

Manual data entry can have its benefits. It allows plan sponsors to stick with a data collection system that works for them and it is almost always the least expensive option in terms of hard, upfront costs. That said, the potential downfall from manual data entry cannot be understated. 

• Manual entry is prone to errors, which can lead to improperly tracked data, Section 101 compliance violations, and penalties from regulatory bodies.
• It can also lead to inaccurate retirement plan balances and contributions, resulting in penalties from the IRS.
• Manual data entry does not adequately protect PII such as Social Security numbers and bank account information. Without safeguarding highly sensitive data, you run the risk of exposing employees to data breaches and potential identity fraud. 
• Manual data entry puts undue burden on sponsor admins, as it requires hours of their time and attention every month that could be spent on higher-value tasks.

2. SFTP or flat files

Secure file transfer protocol (SFTP) and flat files offer another way to transfer retirement plan data. 

With SFTP, you can bulk transfer large files of data in tables (in the form of CSV, JSON, and XML files, for example) over a secure network. The benefits of SFTP methods are that they’re generally easier for most in-house developers to build compared to custom, direct integrations (more on those next). But there are also significant drawbacks:

• SFTP requires sponsor admins to compose custom reports for each data sync and upload them correctly. This often presents technical challenges for your customers, who may be responsible for inputting host domains, keys, and other server-specific information into their system to establish a scheduled sync. 
• SFTP relies on manual data entry to a certain extent, which raises risks and means data has to be validated to avoid errors—a process that drains time and resources for all parties.
• SFTP doesn’t allow for real-time data access, precluding your ability to power the seamless, next-generation functionality business customers are looking for in their technology solutions.

This method is especially cumbersome when data syncs need to happen often and regularly, which will be the case for plan providers and plan sponsors who need to comply with auto-enrollment and auto-contribution increase requirements.

3. Custom integrations

A more sophisticated approach involves direct integrations with the HRIS and payroll systems that house the data you need to perform auto-enrollment and auto-contribution increase functions. 

The beauty of direct integrations is that data syncs happen automatically and in real time, driving efficiencies for all parties, providing your customers with an optimally seamless experience, and giving you the peace of mind that you are always in compliance with Section 101. Crucially, custom integrations can be built to provide read and write capabilities, which means you can also use them to automatically push changes back to HRIS and payroll systems. This is especially valuable when it comes to contribution management. 

Custom integrations also present significant challenges: 

• There are more than 5,700 HRIS and payroll systems in the U.S. market. To adequately cover your customer base, you will need to build custom integrations to at least hundreds of them.
• Building custom integrations in-house is technically complex and requires specialized engineering skills and experience.
• They are also expensive to build and maintain, both in terms of time and money. If you assume that three engineers will work on a single custom integration for three months, that puts the soft costs of just your initial buildout in the ballpark of $200,000. Then, there are the hard, ongoing costs to consider, like the fees many HRIS and payroll systems charge to use their API. For access to a legacy system like ADP, the hard and soft costs combined can run in excess of $1 million.

4. Unified employment APIs

To get all of the advantages of custom integrations without the cost or hassle of building them in-house, you can turn to a unified employment API, which aggregates connectivity to many HRIS and payroll systems at once with a single integration. A unified employment API does the hard work of building and maintaining the integrations, and standardizing and abstracting all incoming data, so your team doesn’t have to. They are infinitely more efficient than custom integrations, so you can get to market faster and, ultimately, at less cost.

Learn more about the advantages and disadvantages of buying a unified employment API versus building integrations in-house.

A Section 101 implementation plan for 401(k) and 403(b) providers

To ensure you have a solution in place to comply with Section 101 by the deadline, we recommend:

• Evaluating your options and making a decision by July 30, 2023
• Implementing a solution no later than September 30, 2023 (keeping in mind that some solutions take much longer to implement than others)
• Spending the rest of the year validating and testing your solution
• Rolling out your solution to all users in 2024 and monitoring performance for complete and compliant functionality. This will give you time to make necessary adjustments before January 1, 2025.

The bottom line: Becoming compliant takes time

As you prepare for SECURE Act 2.0 to come into effect, don’t lose sight of the fact that it will take time to prepare to be compliant with Section 101. The least risky way to ensure compliance—not to mention the most time- and cost-effective solution—is to integrate with a unified employment API like Finch.

Finch does the hard work of integrating with HRIS and payroll providers to facilitate the secure, permissioned flow of critical business data. Our dynamic, unified employment API offers:

• Easy integration: Finch makes it easy for retirement plan providers to integrate with 200+ HRIS and payroll systems, covering approximately 88% of the market. 
• Automated enrollment and contribution management: With Finch, retirement plan providers instantly access the real-time employee directory and payroll data they need to automate 401(k) and 403(b) enrollment, and push contribution changes directly to payroll—no manual intervention needed.
• Increased efficiency: Finch is a pre-built solution that’s ready to use. Plan providers waste no time building and maintaining custom integrations, and plan sponsors save dozens of admin hours a month—a win-win for you and your customers.
• Confident compliance: Finch replaces error-prone manual processes with seamless integrations that let retirement plan providers meet the stipulations in Section 101 of SECURE Act 2.0.
• Strong security: Finch is a pass-through system, and is SOC2 Type 2, CCPA, and GDPR compliant.

Talk to our sales team today to explore ways you can use Finch to ensure compliance with Section 101 of SECURE 2.0 and improve your customer experience overall.

Finch at SHRM23

Finch is proud to be a sponsor of the SHRM Annual Conference & Expo for 2023. Learn what we’re most looking forward to during the upcoming events and how you can find us. 

The SHRM Annual Conference & Expo is one of the premiere events for HR professionals. This year, the conference is taking place at the Las Vegas Convention Center from Sunday, June 11 to Wednesday, June 14. 

SHRM23 boasts a wide variety of education sessions, so teams can customize their schedules and attend panels that address individual challenges and business goals. With over 15,000 attendees and 650+ solutions providers, we’re excited for the chance to network with all of you and demonstrate Finch’s full capabilities in-person.

Finding Finch at SHRM23

We’ll be set up at Booth 2330. Come say hello, and grab some limited-edition, light-up memo boards while you’re there!

Finch focuses on accessing the employment data that's housed in HR, payroll, and benefits systems.

Our universal API integrates with 200+ HR, payroll, and benefits systems to help employers streamline onboarding, optimize employee benefits, and unlock tax savings—amongst many other use cases.

With more than five million API calls every day and tens of thousands of employer connections, Finch is the #1 API for unlocking the vast potential of employment data.

What the Finch team is looking forward to

When we’re not at Booth 2330, we’ll be checking out all the conference has to offer. We’ve looked through the SHRM23 content tracks and are happy to share the ones we’re most excited to attend: 

• At the start of the conference, we’ll be at “Using Integrated Analytics to Showcase the Business Value of Human Capital” since employment data is the heart of everything we do at Finch. 
• We’ll be sure to swing by “The Future of Work: Five Non-Negotiable Priorities for HR's Agenda” to learn more about the ever-evolving reinvention of work.
• We’re also looking forward to “Retirement Legislative Madness: Breaking Down Secure 2.0 Small Employer/No Plan Edition” since our API integrates with HR platforms like Gusto, Zenefits, and BambooHR to automate participant onboarding and deductions and contributions management. 
• The panel on “Analytics Plus Hiring: The Evolving Parameters and Employment Law Concerns” is going to be interesting. We’re curious to learn more about the different ways HR departments are using analytics to improve decisions on their workforce talent acquisition and employee retention, and how they’re gaining access to those much-needed data points. 
• You’ll see us at both the Kick-Off Conference Orientation and Expo Opening Reception on Sunday, June 11, and hopefully we’ll have the chance to watch the iconic Janet Jackson perform at the SHRM23 concert on Tuesday evening. 

Of course, we’re also excited for the recently announced moderated Q&A conversation with 42nd U.S. President Bill Clinton on the Main Stage.

More about Finch

Finch allows you to securely access your customers’ employment data across hundreds of HRIS and payroll systems with a single integration.

Employment data includes:

• Employee directory information like name, contact information, date of birth, manager, salary, and start/end date
• Employee income information including hours worked, salary, wages, deductions, and taxes
• Company information such as legal name, address, taxpayer classification, EIN, and banking details

We recently raised $40 million in our Series B round, co-led by General Catalyst and Menlo Ventures with additional investments from QED, PruVen, and Altman Capital.

Finch is putting this capital to work by investing in both new and existing products—like our Data Refresh endpoint and recent upgrades to Finch Connect—and expanding our team to support customers and partners across HR, fintech, and benefits verticals. 

We were named one of 2023’s Best Places to Work by Built In and recently included on GGV Capital’s API-First Index. 

Follow us on Twitter and LinkedIn for our latest takes on the future of work.

Finch is thrilled to share that it’s been named the Best Innovative or Emerging Tech Solution for the Core HR/Workforce category by the Lighthouse Research & Advisory 2023 HR Tech Awards program.

Now in its fourth year, the HR Tech Awards program highlights HR technology companies that serve employers and employees with entries from North America, Europe, and Asia Pacific. The program has a rigorous judging component with a panel of independent practitioners, consultants, and educators who assess each submission.

Today, employment data is hosted across thousands of disparate systems and employers increasingly expect the tools they use to service their workforce to talk to each other with little friction. Given the fragmentation and rising expectations, employment applications are faced with the costly dilemma of either building 1:1 integrations in-house or losing business to competitors that offer compatibility. Finch helps solve the fragmentation challenge with a unified employment API, allowing businesses to cut costs and time spent on integrations, freeing them up to focus on value-added services that differentiate these applications instead.

Ben Eubanks, Chief Research Officer, Lighthouse Research & Advisory has this to say about Finch:

"Integration of systems and data is one of the most common complaints for HR software today. Finch is helping to turn complicated and technical into the possible, enabling the seamless passing of employee data among 200+ different systems via a single powerful integration.”

According to Lighthouse Research & Advisory data, more than 5,000 providers exist across the HR technology landscape, with more startups and innovators entering the industry every single day. This year, the HR Tech Awards recognizes approximately 1% of those firms for creating solutions that solve problems their customers care about.

The world is moving towards more standardized, open, and interconnected data systems. However, employment data infrastructure remains complex, closed, and fragmented. Finch is dedicated to bringing forth a connected future of employment and is honored to have its technology recognized.

To get a free consultation regarding what Finch can do for your business, talk to our sales team, or if you’d like to test it out on your own, you can sign up for a free account today.

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How to find Finch at Transform 2023–see you there!

Finch is proud to be a sponsor of the Transform 2023 conference. Hear about what we’re most looking forward to at this year’s show.

Transform 2023, the premiere HR conference for business and people leaders, entrepreneurs, and investors, is running from Monday, March 27 to Wednesday, March 29 at the MGM Grand in Las Vegas, Nevada.

Previously known as HR Transform, this year, the conference has expanded the experience to include global leadership, entrepreneurs, and investors. Transform 2023 will offer opportunities to foster more in-depth relationship building, inform modern enterprise policies and programs from a broader perspective, and increase the scale of tech innovation and business transformation. Their goal is to “transform the workforce, workplace, and work of the future.”

Finding Finch at Transform 2023

We’ll be set up at Booth 501. Come say hello, and grab some limited-edition swag while you’re there!

Our universal API integrates with hundreds of HR, payroll, and benefits systems to help employers streamline onboarding, optimize employee benefits, and unlock tax savings, among many other use cases.

With more than five million API calls every day and tens of thousands of employer connections, Finch is the #1 employment data API.

What the Finch team is looking forward to

We’ve browsed through all the inspired offerings on the Transform 2023 Agenda and highlighted events the Finch team is most excited about below:

• We’re looking forward to the session “Funding the Future of Work: The Venture Capital Perspective.” Employee data provides unique insights into budget allocation, and we’re curious to see if this comes up in the conversation.
• The panel on “Using Data to Embrace an Employee-First Approach to Compensation Planning” is calling out to us. At Finch, we know compensation data can inform and shift the thinking around important decisions and processes regarding employees’ salary payments. (We also know this data can be difficult to access, and we’re here to help.)
• We plan to catch the panels on “Using Data to Develop Truly Inclusive Employee Leave Policies” and “Human Centric Design: Building Together,” to gain even more insight into new use cases for employee data.
• Both “Data-Driven Storytelling for HR: Navigating Growth with Operational Insights” and “Should HR Own the Workplace Tech Stack?” promise to be lively discussions. We’re excited to see more HR teams looking to access and use data to drive their impact on business objectives.
• We’ll also be at the official kickoff reception on Monday evening to celebrate the Transform 10 alongside all the forward-thinking organizations who are being recognized this year. (There’s no way we’d miss the official after party either.)
• Finch will be hosting a VIP event at Topgolf the evening of Tuesday, March 28. If you’re interested, please submit a contact request. Space is limited.
• 💡Insider Tip: Don’t forget that PACE 2023 is taking place alongside Transform 2023 on Monday, March 27 as well.

More about Finch

We recently raised $40 million in our Series B round, co-led by General Catalyst and Menlo Ventures with additional investments from QED, PruVen, and Altman Capital.

Finch is putting this capital to work by investing in both new and existing products, and expanding our team to support customers and partners across HR, fintech, and benefits verticals. Follow us on Twitter and LinkedIn for our latest takes on the future of work.

We’re excited to announce Built In has named Finch to its 2023 Best Places To Work! Finch earned 12th place among Built In’s 50 Best Startups To Work for in San Francisco 2023.

The annual awards program includes companies of all sizes — from startups to those in enterprise markets — and honors both remote-first employers as well as companies in large tech markets across the U.S.

“At Finch, we put employee wellbeing first because we believe life and work should fit together. That’s what sets us apart and what has earned us this recognition,” said Jeremy Zhang, CEO at Finch. “We’re proud to have built a culture founded on empathy, meaningful work and opportunities for growth, creating a workplace that allows our employees to show up as their best, most authentic selves — inside and outside of the office.”

Being recognized as one of the Best Places to Work in San Francisco is a clear demonstration of Finch’s people-first culture. Here’s how we help our people do their best work:

• Our core values — execution, curiosity, humility and empathy — serve as the foundation of our culture. These values reflect what we expect from each other and inform all of our decisions, encouraging outside-the-box thinking, teamwork and respect for every voice to create a workplace we love.
• Consciously building a smart, diverse and driven team. We are as passionate about our lives outside of the office as we are about the work we do together.
• Benefits that support employee wellbeing including generous stipends ($1,000 work from home and $200/month flex), covering 100% of health insurance plans for employees, and unlimited PTO (mandatory 15-day minimum per year).
• A remote-first work environment so employees have the flexibility to prop open their laptop wherever life takes them.
• A fast-paced environment offering lots of opportunities for growth and development.

Built In determines the winners of Best Places to Work based on an algorithm, using company data about compensation and benefits. To reflect the benefits candidates are searching for more frequently on Built In, the program also weighs criteria like remote and flexible work opportunities, programs for DEI and other people-first cultural offerings.

“It’s my honor to congratulate this year’s Best Places to Work winners,” said Sheridan Orr, Chief Marketing Officer at Built In. “These exemplary companies understand their people are their most valuable asset, and they’ve stepped up to meet the modern professional’s new expectations, including the desire to work for companies that deliver purpose, growth and inclusion. These winners set the stage for a human-centered future of work, and we can’t wait to see that future unfold.”

Find out what Finch’s award-winning culture is all about. Apply to one of our open positions!

Complying with the SECURE Act 2.0’s auto-enrollment and escalation rules

With the passage of the SECURE Act 2.0, automatically enrolling employees in sponsored retirement plans—and automatically increasing their contributions—is now a legal imperative. In response, retirement plan providers are implementing API technology to quickly and easily auto-enroll 401(k) and 403(b)participants and meet the new requirements.

In December 2022, the Securing a Strong Retirement Act (SECURE Act 2.0) was signed into law. Among the provisions outlined by SECURE 2.0 are new requirements for automatic plan enrollment and contribution escalation. Effective for plan years after December 31, 2024, they compel retirement plan providers to automatically enroll employees upon eligibility in new 401(k) and 403(b) plans and automatically increase the contributions of enrolled employees to that plan every year.

While these updates are exciting from a participation standpoint, the new requirements also come with the potential to create incredible administrative burdens especially in cases where employers are rapidly growing their workforce. In response, innovative retirement plan providers are implementing API solutions that integrate with employers’ HR information systems and payroll systems to ensure seamless SECURE 2.0 compliance. In this article, we explore the SECURE Act 2.0’s auto-enrollment and auto-escalation requirements plus the API technology that retirement plan providers are turning to make true automation a reality.

A SECURE Act 2.0 Summary

Building on the work of the Setting Every Community Up for Retirement Enhancement Act of 2019, SECURE Act 2.0 lays out widespread changes to the U.S. retirement system. The act is intended to make it more affordable for employers to sponsor retirement savings plans, and easier and more attractive for employees to participate.

The provisions of SECURE Act 2.0 include but aren’t limited to:

• An increase to the credit small businesses can receive for starting a pension plan
• Authorization for 403(b) plans to participate in multi-employer plans and pooled employer plans
• Higher “catch-up” contribution limits for individuals over age 50
• Permission to treat student loan payments as elective deferrals for purposes of matching contributions
• Permission for employers to incentives like gift cards to encourage plan participation among employees
• Allowance to withdraw emergency funds of up to $1,000 from retirement plans without text penalty
• An increase in the required minimum distribution age to 73
• The requirement that employers allow long-term, part-time workers to participate in sponsored retirement plans
  
  

In total, the plan details dozens of new rules and regulations. Retirement plan providers as well as employers should consult qualified legal counsel to understand the full extent of the impact of the law on their operations.

SECURE 2.0 auto-enrollment and auto-escalation

One of the most broadly impactful provisions of SECURE 2.0 is detailed under Section 101 of the law, which stipulates that new 401(k) and 403(b) plans must now automatically enroll employees upon eligibility. According to a summary issued by the Senate Committee on Finance, the decision to require auto-enrollment a matter of financial equity:

“One of the main reasons many Americans reach retirement age with little or no savings is that too few workers are offered an opportunity to save for retirement through their employers. However, even for those employees who are offered a retirement plan at work, many do not participate. But automatic enrollment in 401(k) plans…significantly increases participation. Since first defined and approved by the Treasury Department in 1998, automatic enrollment has boosted participation by eligible employees generally, and particularly for Black, Latinx, and lower-wage employees.”

Per SECURE 2.0, employees must be initially enrolled at a minimum of 3% of their gross pay but not more than 10%. Plans are also required to increase the distribution of enrolled employees each year by 1% until contribution reaches at least 10%, but not more than 15%.

Exceptions to the provisions include all current 401(k) and 403(b) plans, which are grandfathered into pre-SECURE 2.0 rules, as well as businesses with 10 or fewer employees, businesses under 3 years old, church plans, and government plans. Employees also have the right to opt out of enrollment or distribution escalation at any time.

What SECURE 2.0’s 401(k) auto-enrollment means for plan providers

Automatically enrolling all employees to a retirement plan upon eligibility is a significant undertaking. By SECURE 2.0’s definition, “automated” enrollment simply means enrolling those employees on an opt-out rather than an opt-in basis.

But that definition of automated doesn’t necessarily translate to a simpler, less manual process. A plan still needs to be notified of newly eligible employees and provided with the employee census data and payroll authorization it needs to process enrollment and manage recurring plan deductions. Without the right technology in place, employers and plans are forced to communicate all of this information by email, phone, spreadsheet, or secure file transfer. Not only is the back-and-forth time consuming, it increases the risk of error and noncompliance with SECURE 2.0’s provisions, and the potential of penalties and fine.. The hassle and risk only compounds in cases where employers are rapidly adding new employees.

How to auto-enroll 401(k) participants

To avoid this drain of resources and to eliminate the risk of SECURE 2.0 noncompliance, true automation is critical. Retirement plan providers are now turning to API integrations with employers’ HR information and payroll systems to eliminate the manual steps historically needed to enroll employees and manage their deductions on an ongoing basis.

With an API integration, retirement plan providers have a direct, permissioned data connection to employment systems of record. This allows plans and employers to quickly and seamlessly exchange the data needed to enroll employees in 401(k) and 403(b) plans and manage their retirement deductions. What’s more, these data exchanges can be triggered by events without manual intervention, which means no person has to shoulder the responsibility of ensuring newly eligible employees get enrolled. The API integration takes care of it automatically in the truest sense of the word.

Consider this example:

1. Company A is growing quickly and hires and onboards 7 new employees on the same day.
2. As a matter of course, those employees are added by Company A to their HR information and payroll systems of record, which Company A’s 401(k) plan is integrated with via API.
3. In turn, the 401(k) plan is automatically made aware that newly eligible employees have joined the company, which triggers an instant exchange of real-time data.
4. With the information it retrieves from the HRIS, the 401(k) plan is able to automatically enroll all 7 employees. Via its direct payroll system connection, it is also able to make direct payroll changes to initiate recurring retirement contributions—no forms, emails, data entry, or spreadsheets required.
   

As a result, both the employer and the retirement plan provider save hours of administrative work and avoid delays to plan enrollment.

Implementing an API integration to auto-enroll participants and manage deductions

Retirement plan providers looking to enable HRIS and payroll system connectivity have a couple of options: build one-to-one integrations with all of the HRIS and payroll systems their customers use or partner with a turnkey, universal API that integrates with hundreds of HRIS and payroll systems at once.

Learn more about both approaches to HRIS and payroll integrations in our build vs. buy report.

The first approach offers plan providers ultimate control over their integration strategy but requires niche payroll expertise and a significant, ongoing investment of development resources. The second option turns over some of that control to a integrations partner but also comes with distinct advantages:

• More coverage, quicker—a universal API provides connectivity to many systems at once
• Faster go-to-market timeline—implementation takes weeks instead of months or more
• Fewer resources—the integrations provider does all of the heavy lifting, freeing up a plan’s internal team to focus on other priorities
• Worry-free maintenance—the integrations provider ensures the connections are working smoothly even as HRIS and payroll systems make updates

How Finch helps ensure SECURE 2.0 compliance

Finch makes it easy for retirement plan providers to integrate with 200+ HRIS and payroll systems with a single integration. Not only does our universal API enable the instant retrieval of real-time employee census data needed to automate 401(k) and 403(b) enrollment, it also allows plan providers to push changes directly to payroll. Using Finch’s Benefits endpoint, plan providers can initiate and manage pre-tax, post-tax, recurring, and one-time payroll deductions as a dollar amount or percentage of employees’ gross pay, ensuring easy compliance with the SECURE Act 2.0’s auto-escalation clause.

Meanwhile, the employer sponsoring the plan doesn’t have to lift a finger to upload deduction files or manually enter changes, saving them from hours of ongoing administrative work and avoiding countless potential human errors and potential fines.

Learn more about how retirement plan providers use Finch to build best-in-class customer experiences.

Get SECURE 2.0 compliant with Finch

The auto-enrollment and auto-escalation provisions of the SECURE Act 2.0 will drive retirement plan participation, but not without potential challenges and hurdles. Luckily, retirement plan providers who want to stay compliant while avoiding hassles and potential fines can leverage Finch’s universal HRIS and payroll system API to make true auto-enrollment and contributions management simple and secure. Register for a free test account to explore how to leverage Finch’s HRIS and payroll integrations today.