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Client has approx. 5000 employees. There is very high turnover within the first 90 days of employment (about 40%). The client permits date of hire enrollment so 401(k) sign up happens during completion of new hire paperwork. QUESTION: Can automatic enrollment be added to the plan that such that participants become automatically enrolled first of the month after their 90th day of employment? Therefore, anyone who's made it through the first 90 days and hasn't completed a 401(k) election would then be automatically enrolled. Thanks!

A draft document was prepared for review/discussion last fall. This draft document contained a 3% default deferral. Upon final discussion, the client chose to use a 4% default deferral for automatic enrollment starting January 1, 2016. The materials provided to the participants from the investment provider all explained how a 4% deferral would begin if no contrary election was made. However, the plan document that was executed still had a 3% default deferral instead of 4%. It is a calendar year plan. The issue was just now noticed. The question is: Does this necessitate a VCP application to properly fix, or is possible to adopt the 4% in an amendment now, retroactively effective January 1, 2016, as long as it is adopted before the last day of this plan year?

Plan has automatic enrollment (3% of pay). Payroll date: 7/2/1015 (includes wages for service provided through June 27) Payroll provider's cutoff for paycheck changes: June 28. Four new employees might enter on July 1. One of these 4 quits June 30 and gets a paycheck on July 2 and another on July 17. No deferrals withheld from either. No problem. The other 3 did not return any deferral elections. They get paychecks on July 2. No deferrals withheld. Automatic deferrals withheld on July 17. Problem? Document says "An Eligible Employee shall be deemed to have made an elective deferral election upon satisfaction of the eligibility requirements..."" ... provided however that in a reasonable time before the deemed election takes place the Eligible Employee shall receive a notice that explains the ... right to elect to ... alter the amount, ... including the procedure for ... the timing for implementing such election.""The Eligible Employee must have reasonable opportunity to file an election to receive cash in lieu ... before such deemed election...""The Company shall contribute to the Plan with respect to each pay period an amount equal to the Elective Deferrals . . . for such pay period"The Plan Administrator intends to implement this uniformly and consistently. Do they have a valid legal basis for not withholding on July 2 for these other 3 employees?

When can a plan with an EACA be amended to remove the EACA? Is mid-year acceptable, or must it be as of the first day of the plan year since an EACA can only be added as of the first day of the plan year (with some exceptions of course but not relevant to the question here.)