Turning off Automatic Contribution Arrangement

[Dennis Povloski]

If a plan currently has an automatic contribution arrangement, and the sponsor doesn't want to deal with that anymore, can you turn it off, stop deferrals, and make it so that employees must turn in a deferral election in order to defer from that point forward?

That is if employees were deferring because they were defaulted into the plan under the ACA, can you stop their deferrals when you get rid of the ACA? or must they still continue to defer at whatever rate they were deferring when the ACA was last in effect?

[masteff]

I don't know the technical answer but...

Why not go the conservative route and send a new mailing to anyone who was defaulted into the plan? It should simply explain that they were defaulted into the plan and if they wish to discontinue, here's how.

My concern is at least a few of those people want to be in the plan and the fix for lost deferral opportunity would actually cost the company money, a lot more money than a simple mailing.