thoughts on HPI deferral elections?

Unfortunately, we're getting closer to the 1/1/26 buzzsaw of required Roth catchups for the Highly Paid Individuals (or High Earners, whatever).

I get that it's allowed to not make these participants complete a new deferral election form if they have elected pre-tax deferrals - the plan sponsor has the authority to cut them off at the base limit and then take any additional deductions as Roth.  And for especially large plans, that might be the most practical method.

But what about smaller plans?  Does it "feel" better to allow the participant to sign off on something, or is just a note telling someone "hey, this is what's going to happen" sufficient?  I'd really rather not make this a 'case by case' thing because it's already enough of a pain to deal with.

Thanks.

Generally applicable across the board, getting affirmative elections is better than using default elections.  

An implied-assent default election (with an opt-out) makes most sense after the § 414(v)(7)-affected employee (not an unaffected self-employed individual) has not responded to the plan administrator’s repeated efforts to get the participant’s affirmative election.

(Some of us are planning for workforces with hundreds or even thousands of § 414(v)(7)-affected employees, which inevitably will have some nonresponses. A smaller employer might have fewer employees to reach. And remember, a partner or other self-employed individual is unaffected.)

Some employers might not apply a default election until the without-catch-up deferral limit is exhausted. For some employees, that might not happen until August or September 2026.

Imagine an age 60-63 employee wants 2026 deferrals of $36,500 (2026 est.), is paid on a 24 pay cycle (the 15th and the last day of each month), and instructs $1,520.83 per pay. The first 16 pays would be within the without-catch-up limit, so the first $24,500 (2026 est.) won’t be exhausted until the 17th pay—September 15.

Yet, for some employees, a deferral exceeding $24,500 (2026 est.) could happen as soon as January.