Peter Gulia Posted October 28, 2021 Posted October 28, 2021 A plan’s sponsor wants to provide an automatic-contribution arrangement for some specified classes of non-highly-compensated employees, but not others. (All highly-compensated employees would be excluded.) May a plan provide this without tripping on a tax-qualification condition? Is it feasible to provide this using an IRS-preapproved document without losing reliance on its IRS letter? Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com
RatherBeGolfing Posted October 28, 2021 Posted October 28, 2021 If it's an ACA, not EACA or QACA, yes. Bill Presson, Luke Bailey and Peter Gulia 3
Peter Gulia Posted October 29, 2021 Author Posted October 29, 2021 Thank you for the quick and clear help. Lacking a § 414(w) “undo” distribution for those who had been inattentive makes an automatic-contribution arrangement a non-starter. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com
MWeddell Posted November 2, 2021 Posted November 2, 2021 It's my view (and I've seen others within my company and elsewhere agree) that automatic enrollment is not a benefit, right or feature subject to non-discrimination testing. So that eliminates another barrier if one implements auto enrollment for only some eligible employees in a plan.
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