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Amendment to automatic enrollment mid-year


pixiebear

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We have a client with an existing 401(k) plan with an EACA. The plan currently states that all eligible employees will be subject to the 3% automatic deferral each year so an employee will need to make an affirmative election to opt out or defer a different percentage. The Plan Sponsor wants to have the recordkeeper handle the automatic enrollment going forward. The recordkeeper cannot provide notices and automatically enroll all eligible employees each year, their system is only setup to automatically enroll newly eligible employees or employees with no deferral election. Can we amend the plan as of 10/1 to change the automatic enrollment under the EACA to newly eligible employees or employees with no election or do we have to wait until 1/1/2025?

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