State payroll deduction laws impact 401(k) automatic enrollment?

[Guest Eullla]

We are currently looking at the option of requiring employees to be automatically enrolled in our 401(k) and needing to make an election not to participate. However, we are concerned about the various state regulations requiring authorization of the deduction. I am looking for state by state information explaining if automatic enrollment into a 401(k) plan is allowed under their regulations. Any information you could provide on this subject or resources you are aware of would be greatly appreciated.

[Harwood]

http://www.reish.com/practice_areas/EmpBen...irsguidance.cfm

[GBurns]

The application is dated in 1999, and there is no mention of a response on their site, Does anyone know what has happened or what was the DoL response?

[Harwood]

I am positive that Reish never received a response from the DOL

[Guest jmarini]

This isn't a direct answer to your question but we have used auto enrollment for large Plans with participants in just about every state for 5+ years, because we strongly feel its the right thing to do. We've never had any problem. Our Plan sponsors state on their employment application that upon hire, employees will be enrolled in the 401(k) unless they decline, each new hire is mailed a packet of info prior to the deduction starting with instructions on declining enrollment (and the envelope has "IMPORTANT INFORMATION ABOUT YOUR AUTOMATIC ENROLLMENT IN THE 401(K)" printed in big red letters on the front), and if the deduction starts and anyone objects, the deduction is stopped immediately. We've never had a problem because we're doing a good thing, we're doing it the best way we possibly can, and we immediately un-do it for anyone who wants it undone (a very rare occurrance - our plans average a 95% participation rate).