Auto enroll

[rlb64]

What are the employer's options as far as implementing auto enroll? Obviously, the employer can apply auto enroll to new hires. But, how can it be rolled to those who already met eligibility? What about those who previously elected out or elected a % less than the default...can we make them reenroll?

[Jim Chad]

I'm hoping that all of your questions will be options in a prototype document. I have seen nothing that said that any of these isuues must be handled a certain way.....unless it is a safe harbor Plan. Then, I think, we need to hire everyone the same.

What I want to choose is:

Anyone who is currently deferring, leave alone.

Anyone eligible who isn't, even if they have opted out earlier than today, is autoenrolled.

Does anyone have any experience on problems with this approach?

[John Feldt ERPA CPC QPA]

It is also possible to bump up everyone who is currently deferring below the automatic enrollment percent, if you want to (your amendment would need to state that). You should give them a notice and enough time to make/sign a contrary election (I would give them a 30-day period) before the automatic percent would otherwise apply.

[Guest Stacy1002]

With the notice provided to the participants along with the option to choose 0%. Does an annual notice need to be provided to these participants each year even if the percentage will stay at 3% as indicated in their first notice? Basically the 3% is applied to new hires, they did not want to touch participants who had already met eligibility. It was also decided not to increase the limit each year automatically.

[John Feldt ERPA CPC QPA]

I think an annual notice is required for each participant who remains defaulted (they've made no election to defer a contrary amount/percent). If the plan is Safe Harbor, we tend to send it along with the Safe Harbor Notice.