When to withhold money for Automatic Enrollment plans

[leesuh12]

I am looking for insight on when money has to be withheld for automatic enrollment plans.  For example:

Plan has:

Age 21 &  3 months of service for eligibility

Entry Date is first day of month following meeting requirements

If a person meets eligibility on 10/16, they can enter on 11/1.  Does the plan sponsor actually withhold the money on the 11/1 pay period if no election or opt-out has been chosen by participant?  Or do they wait to withhold until the Opt-out period has ended?  

[ETA Consulting LLC]

The opt out period should end on 11/1; and deferrals should begin on that date.

Good Luck!

[401king]

55 minutes ago, leesuh12 said:

wait to withhold until the Opt-out period has ended?

What is the opt-out period? Is that a company policy?

[K2retire]

1 hour ago, 401king said:

What is the opt-out period? Is that a company policy?

It is likely a recordkeeper issue.

[Peter Gulia]

Following ERISA § 404(a)(1)(D), a plan’s administrator should follow the provisions of the documents that govern the plan (unless such a provision is contrary to ERISA, other Federal law, or unpreempted State law).

 

Beyond the written plan, the administrator should read the administrator’s ERISA § 514(e) automatic-contribution-arrangement notice.

 

If the written written plan’s proper provisions and the notice are logically consistent, the administrator would follow them.

 

If the notice does not sufficiently describe the plan’s provisions, the administrator should rewrite the notice.