Auto Enrollment / Corbel Document

[austin3515]

Apparently option 1 below will wipe out all existing elections, so if Johnny is contributing 8%, he gets dropped down to 3%. Can anyone explain to me why you would ever use option 1? Option 2 would leave anyone contributing more than 3% alone.

1. [X] All Participants. All Participants, regardless of any prior Salary Deferral Agreement.

2. [ ] Affirmative Election of at least Automatic Deferral amount. All Participants, except those who have an Affirmative Election in effect on the effective date of the Automatic Deferral provisions that is at least equal to the Automatic Deferral amount and except as otherwise provided below with respect to the escalation of deferral provisions.

[Belgarath]

Can't think of a good reason offhand. Perhaps if NOBODY is contributing the ACA minimum? Could it be that there are recordkeeping platforms out there that require this option, so one or more TPA's requested this option from Sungard? Less confusing for a new plan, or for some clients? (I'm grasping at straws)

You should send a query to Sungard. Perhaps they can tell you a good reason that we haven't considered.

[ESOP Guy]

Maybe some kind of business transition happened and it is easier to wipe the slate clean??????