Paperless Enrollment

[SRP]

I am interested in information regarding restrictions around paperless enrollment within a 401(k) plan.

My question is related to obtaining electronic signatures via Web or IVR systems.

I have always believed that the enrollment form is an agreement (e.g. a contract) between the Employer and the Employee to withhold a portion of the compensation and deposit the contribution into the plan trust. Therefore, obtaining an electronic signature via the ESIGN act will suffice in relation to official execution of this agreement.

However, I am being told that there are 15 states in which such an electronically signed agreement is invalid because those states do not recognize or allow electronic signature for agreements.

Is it true that a participant's paperless enrollment into a 401(k) plan is invalid in some states?

Thank you in advance for your comments.