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I have done a lot of research on this and talked to more than one attorney and this seems to be landing as follows: 1) When mandatory auto enrollment is being added to a plan that was effective before the EACA was effective, a "sweep" is not required. This can happen when either a) new plans established after 12/29/2022 with auto enroll mandated 1/1/2025; OR b) when a new plan is not subject to auto enrollment right away because of the <10 Employee exception and the new business (3 year) exception. 2) When mandatory auto enroll applies to a new plan on the effective date of the Plan, a sweep is required. The law is less clear to me here, but if a Plan's Elective Deferrals are effective 7/1/2025, then there must be an active EACA on that date. So everyones plan entry date is 7/1/2025 and if no one is enrolled on 7/1/2025 then the plan did not include an EACA on 7/1/2025. That part I think is straightforward enough regarding why a sweep being required makes sense. I had suggested in one conversation limiting application of the EACA to people who would have become eligible on 7/1/2025 even if the Plan was effective years ago but no one liked that idea (and thus not doing a sweep). I personally think it works but I don't want to go too rogue. I am somewhat surprised that there is not a lot more conversation and a lot more articles on this very topic. This is going to be front and center really now as we establish new plans. I am curious to know if anyone has come to these same conclusions or something different. Too bad the IRS is letting us squirm without any guidance. To me, to sweep or not sweep is the most important question facing our industry today. Please discuss!

There may be more current info from the IRS, but the last I looked at this, there was some controversy concerning a requirement to add auto enrollment to a Safe Harbor Non-ERISA plan (as opposed to a Non-Electing Church plan which is by law, not ERISA and, also, clearly exempt from the SECURE 2.0 Auto Enrollment procedures and rules) . The initial assumption was that there was no exception for a Safe Harbor Non-ERISA plan but those of us who work in this area pointed out that the auto enroll provisions could cause the sponsor to assert a level of control which could make the plan ERISA. A recent ASC broadcast reiterated this concern. There may be, further, some state law considerations: A Non-ERISA plan is subject to state law and there are states which still have auto enrollment prohibitions. Except for any Non-Electing Church plans which you may have, I would set aside these Safe Harbor Non-ERISA plans and keep looking for more clarity on this point as the Cycle 2 403(b) pre-approved documents come out and become available for use.

I have extreme doubts that the IRS would just call and not have a standard form letter to mail out. I can’t be 100% certain this is a scam, but it’s got to be a scam or a very uninformed agent regarding IRS procedures.

Recent article that may (or may not) provide useful info for this specific situation: https://irahelp.com/slottreport/the-qcd-dance/

No. That does not sounds normal at all. I've only ever seen letters for missed Form 945. I've never had the IRS call about 945 or something like it. if they call again the plan should get the agent's number, name, and their supervisor's name and number. It sounds very fishy. Not to mention the information given is wrong.

I don't know what this means: "Issue with payroll caused this person to defer 10% Roth instead." Do you have a failure to comply with plan terms if regular deferrals were elected and instead Roth is credited? Your solution might make the participant happy enough, economically, if you did a full gross up (calculate it before you suggests it), but what about compliance?

I don't know the authority but it is generally understood when you use this it is the fifth anniversary of the time the plan participant commenced participation in the plan if employed at that time.

But even if that pledge is not a prohibited transaction, whether a retirement plan should allow the corporation to do the dealings described involves a distinct set of fiduciary-responsibility questions. Each fiduciary of the retirement plan should lawyer-up. And each of them might prefer a lawyer free from others’ interests.