Auto enrollment immediate eligibility

[Guest IRISH79]

Does an auto enrollment plan make sense when there is immediate eligibility to participate?

[Guest PBJ]

Immediate eligibility does not mean that more people are going to participate (i.e., enroll in the plan), it just means that those that wish to participate do not have to wait. I often think of automatic enrollment as the tool to get those people who are reluctant to participate, or who are on the fence, into the plan. It forces them to take action to get out of the plan instead of waiting for them to elect into the plan. Auto enroll seems, to me, to be a way to boost enrollment.

So even if you have immediate eligibility you do not necessarily have everyone enrolling.

Just my opinion....

[JanetM]

Just be mindful of the turnover. If turnover is high, you will have lots of small account balances and make lots of small forced distributions. This will lead to increased costs and administrative burdens.