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Posted

I saw an article once discussing giveaways to encourae enrollemnt. Is it allowed, etc.? I recall the answer is yes, but if someone knows where I read this that would be awesome! I think it came out in the benefitslink daily email.

Austin Powers, CPA, QPA, ERPA

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Posted

I remember checking with our ERISA counsel on whether we could give a prize (or have a drawing for a prize) to give to employees who sign up for the 401(k) Plan. The answer I got at that time (2002) was that you could NOT give a prize, gift, or selectively include someone in on a drawing for a grand prize that is conditioned on their enrollment.

Having said that, if you are having enrollment meetings, you can certainly offer a prize or have a drawing for anyone in attendance. You just can't condition the prize award on their actual enrollment into the plan.

Hope that helps.

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