Auto Enroll and Escalate? Well maybe......

[Mr Bagwell]

Plan wants to add auto enroll and escalate for 2017 so we set up a conference call to discuss.

Get this: Based on an auditors recommendation, the employer requires that ALL employees acknowledge and sign documentation each year for their 401k deferral percentage. So Joe comes meets with HR and HR says, "I see you are deferring 3%. Would you like to do that for next year?" "Yes, I would." "Great, sign here."

We don't see where auto enroll would come into play because everyone is making an affirmative election. Same thing with auto escalate; employee is effectively making an election to increase, decrease, or stay the same each year.

It appears that I would need to have the HR department repeal some of their procedures.

Anyone have any suggestions or run across this before?

[Belgarath]

Wow, I wish all of our employers would do this. When I think of the headaches and errors that would be prevented...

But in answer to your question, no, I have no suggestions. It is possible, depending upon how it is presented at the meeting with the employee/HR, that an auto escalation might improve deferral percentages. "You deferred 3% last year. This year it automatically goes to 4% unless you elect otherwise. Sign here." It might overcome a certain amount of inertia.

[K2retire]

I have a very small client who, I suspect, does exactly that. The first year of auto enrollment, everyone magically elected the default percentage. My best guess is that they do not understand the concept of auto enrollment.

[Mr Bagwell]

The irony for me is that the controlling nature of HR is killing the effectiveness of auto enrollment and escalation.

[TPAJake]

We require HR certification & annual signatures on our triple-stack match plans, but that's just because we want definitive proof that we gave everyone notice & opportunity in case the DOL or IRS comes calling. In your situation is definitely sounds counter-productive.