deferrals without enrollment forms

[Guest SPOT]

Client withheld money from employee paychecks without completed enrollment forms. Employees email HR department asking them to withhold money. Is an email sufficient? My initial reaction was that these are not 401(k) contributions and the employer should return the money to the employees, have the employees complete enrollment forms and then withhold deferrals from pay. Any thoughts?

[JanetM]

Maybe I am missing your point, but if employees asked to have money put into the plan why would you return it? If the forms are that important just send them a form and ask them to complete and return.

Many plans operate in paperless environment.

[Guest SPOT]

I just want to make sure all bases are covered. While plans do operate in a "paperless" environment, aren't there certain requirements for electronic signatures, etc. The employees weren' provided with any forms (enrollment, beneficiary designation and SPD).

[JanetM]

I would quickly provide them with the SPD and beneficiary form. As far as paperless goes, there are couple ways. Participants call on phone to automated system or go online. When they use combination of ID (maybe SSN) and PIN or password they are deemed to be issuing direction to the plan.

Just curious about one thing, have they directed their investments? How do they go about that? Is there phone or online site to manage investments or make changes?