The Automatic IRA Act of 2025 aims to expand retirement savings by establishing comprehensive rules for automatic contribution retirement plans and arrangements under the Internal Revenue Code. It defines these arrangements to include certain defined contribution plans, automatic IRA arrangements, and SIMPLE IRA plans, setting forth specific requirements for their operation. Key provisions include notice requirements for employees, broad eligibility criteria with limited exclusions, and automatic enrollment with a default contribution rate. This rate starts at 6% of compensation and gradually increases to 10%, with an option for employees to elect a different percentage or opt out entirely. The bill also mandates specific investment options, such as target date funds, principal preservation, and balanced options, and prohibits unreasonable fees for plans not covered by ERISA. For automatic IRA arrangements, the bill specifies that payroll deduction contributions will default to a Roth IRA if no election is made. It also waives the early withdrawal penalty for distributions made within 90 days of an employee's initial automatic enrollment. To support implementation, the Secretary of the Treasury is directed to create model notices, enrollment forms, and a website providing clear information on certified automatic IRA providers and investment options. The legislation establishes an Automatic IRA Advisory Group to provide recommendations on best practices for these arrangements, focusing on saver interests, disclosures, and low-cost investment options. Furthermore, it imposes an excise tax of $10 per employee per day on employers who fail to maintain or facilitate an automatic contribution plan or arrangement, with certain exceptions for small employers, governmental/church plans, and new businesses. To incentivize participation, eligible small employers (those without an existing retirement plan) can receive a $500 tax credit for the first three years they facilitate an automatic IRA arrangement. Finally, the bill includes a preemption clause, superseding any state laws that would directly or indirectly prohibit or restrict automatic IRA arrangements, ensuring a consistent national framework for these retirement savings initiatives.