Enrollment Date

[mjf06241972]

When is the cut off for an employee to normally enroll in 401k plan?  For example, they meet eligibility on 7/1 but don't hand enrollment form until 7/15.  Is this ok?

Thanks.

[Bri]

The plan document should determine when an employee may enroll.  Or when they may change their election (0% as of 7/1, but 4% as of 7/15).

A fun case is when the document alludes to administrative procedures, in which case the plan administrator can decide whether 7/15 would still be okay :)  (on a non-discriminatory basis, of course!)

[Bird]

Generally, I wouldn't blink an eye and would allow this person to start contributing after they turn in their enrollment form (actually we don't get that involved in that end of it but if someone asked that's what I'd say).  All or almost all of our plans allow changes every pay period, and in that scenario it is 100% ok.  

If the plan only allowed changes every quarter and you wanted to get hypertechnical, you could take the position that this person elected 0% as of July 1 and has to wait until Oct 1.  I think that's silly.  But it raises other questions, like did the person have the opportunity to defer in time for a July 1 start?

Just a caution - don't confuse "open enrollment" a la a health plan with "enrollment" in a retirement plan.  This person was a participant from July 1 and changes in deferral elections after that are dictated by the terms of the plan (or as noted, by administrative procedures).