rehired employees with auto enrollment

[K2retire]

Plan has auto enrollment. Rehired employees become participants on the date of rehire. Must the auto enrollment start with the first paycheck, or must the employee be given a window to opt out before it begins?

The record keeper says that 30 days notice is mandatory and they will issue the notice 7-10 days after the first payroll that includes the rehired employee. That means the auto enrollment would actually not begin for about 60 days, unless the employer handles it manually rather than through their usual automated process.

[GMK]

FWIW, unless the plan doc says differently, I don't see this as a new enrollment. The rehired employee basically continues her/his previous participation, just disregarding the period of time she/he wasn't an employee. The deferral rate election and investment elections that were in place when she/he left employment continue to apply and can be changed as often and at the times normally specified by the Plan for all participants. But maybe the plan doc specifies something different for rehires.

[K2retire]

The auto enrollment feature was implemented while the rehired employee was not an employee. And they often rehire summer interns who met eligibility, but didn't pass a plan entry date before terminating.

[Guest A_Dude]

Well, if you give him the notice and wait 30 days, doesn't that put you in conflict with the retro-active "re-entry" into the plan. He is eligible from day one and then you would have to make up lost deferral opportunities...

I'd say give the notice ASAP, and let him know he needs to make an election if he doesn't want to defer. And possibly a statement to use his old elections for safety if he chooses.