12/28/2007: Overview: Automatic Enrollment (Spencer Fane Britt & Browne LLP)
Excerpt: "A 401(k) plan may be amended to provide for automatic enrollment at any time. That is, an automatic contribution arrangement (including an eligible automatic contribution arrangement) may be implemented without waiting until the first day of a plan year. On the other hand, any qualified automatic contribution arrangement must be implemented as of the first day of a plan year, and it must remain in effect for at least 12 months. This is because a QACA must comply with the same rules that apply to pre-PPA safe-harbor plans. Prop. IRS Reg. §1.401(k)-3(a)(2) (cross-referencing IRS Reg. §1.401(k)-3(e)(1)). Presumably, this full-plan-year requirement is designed to avoid the complications that would result from having a plan subject to ADP and ACP testing for only a portion of a plan year."
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