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Rev Proc 2015-28 provides a "9-1/2 month rule" for Elective Deferral Failures associated with missed elective deferrals for eligible employees who are subject to automatic contribution features under a 401(k) or 403(b) -- including employees who made affirmative elections in lieu of automatic contributions but whose elections were not implemented correctly. Question: Does the affirmative election "in lieu of" automatic contributions include only a participant's initial affirmative election opting out of auto-enrollment, or would it include the initial election and any subsequent affirmative election a participant makes if that participant is in the class of participants covered by the automatic enrollment feature? Proposed Answer: It includes the initial affirmative election as well as any subsequent affirmative elections. This is true regardless of whether the plan contains an automatic escalation feature. (Assumes an EACA continues to cover participants who make an affirmative election -- i.e., annual notice continues to be provided to participants who make an affirmative election.) Rationale: Consistent with the objective of encouraging automatic contribution features, nothing in the new rule specifically limits application to a participant's initial affirmative election. Section 4 of Rev Proc 2015-28 adds new section .05(8) of Rev. Proc. 2013-12 Appendix A that says in part: "If the failure to implement an automatic contribution feature for an affected eligible employee or the failure to implement an affirmative election of an eligible employee who is otherwise subject to an automatic contribution feature does not extend beyond the end of the 9-1/2 month period after the end of the plan year of the failure..." Further, a participant who makes an affirmative election is continued to be covered by an EACA (if the plan provides) so it does not make sense to limit the correction only to an initial election. Example: Calendar year plan with auto-enrollment at 3%. Participant becomes eligible at 1/1/2015 and immediately opts out by affirmative election. Participant subsequently elects to defer 5% as of 7/1/2015, but the election is not implemented. The Participant does not notify the Employer, and the Employer implements the correction no later than the first payroll made on or after 10/15/2016. The Employer gives appropriate 45-day notice after deferrals begin and makes up the match with earnings within the "SCP correction window" for significant operational failures. No QNEC is required for the missed deferrals because the correction is appropriate under the "9-1/2 month rule" of Rev. Proc. 2015-28. Agree? Disagree?