--- title: Does Adding an Automatic Escalation Option Require a Plan Document Amendment? description: Can we add a box to our deferral election form for participants to select elect automatic deferral increases or do we have to amend our plan document to do it? image: https://www.dwc401k.com/hubfs/Knowledge%20Center/Pillar%20Categories%202024/PNG%20-%20with%20category%20name/hero_401_png_category.png --- [![logo](https://www.dwc401k.com/hubfs/_global/logo.svg "logo")](https://www.dwc401k.com/) [![logo](https://www.dwc401k.com/hubfs/Dwc-2019/SVG/logo.svg "logo")](https://www.dwc401k.com/) [![Contribution Limits](https://no-cache.hubspot.com/cta/default/3113501/af3ae025-72b1-41fa-8855-5e196d6c26e4.png)](https://cta-redirect.hubspot.com/cta/redirect/3113501/af3ae025-72b1-41fa-8855-5e196d6c26e4) [![Log in](https://no-cache.hubspot.com/cta/default/3113501/3466ce37-58ba-4a93-bddb-0d4c8bb8ccbc.png)](https://cta-redirect.hubspot.com/cta/redirect/3113501/3466ce37-58ba-4a93-bddb-0d4c8bb8ccbc) [![services-icon1](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon1.png) ## Plan Document A properly drafted document is the foundation of achieving the company's objectives and keeping the plan in operational compliance. ](https://www.dwc401k.com/services/plan-document) [![services-icon2](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon2.png) ## Plan Compliance We have a fundamental understanding of how critical plan compliance is to both the IRS and Department of Labor. ](https://www.dwc401k.com/services/plan-compliance) [![services-icon3](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon3.svg) ## Defined Benefits Services We work with business owners and investment advisors to determine what makes the most sense by providing a detailed cost benefit analysis. ](https://www.dwc401k.com/services/defined-benefits-services) [![services-icon4](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon4.svg) ## Mergers, Aquisitions & Related Company Analysis The DWC team is well-versed enough in the nuances and is ready to help you navigate the situation. ](https://www.dwc401k.com/services/mergers-acquisitions-analysis) [![services-icon5](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon5.png) ## Plan Corrections DWC's extensive experience with both the IRS and Department of Labor voluntary correction programs allows us to help you address just about any accident that might happen. ](https://www.dwc401k.com/plan-corrections) [![services-icon6](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon6.png) ## Government Audits Being selected for an audit can feel overwhelming, but the process doesn't have to be. ](https://www.dwc401k.com/services/government-audits) ![service-right-icon](https://www.dwc401k.com/hubfs/QOTW/March%202020/service-right-icon.svg) ## Investment Advisor Support DWC has a long history of successfully partnering with investment advisors. 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[ DWC ](https://www.dwc401k.com/blog/author/dwc) | Published: 08/22/2017 | [Automatic Enrollment](https://www.dwc401k.com/blog/topic/automatic-enrollment), [Question of the Week (QOTW)](https://www.dwc401k.com/blog/topic/question-of-the-week-qotw), [DWC](https://www.dwc401k.com/blog/topic/dwc), [Automatic Escalation](https://www.dwc401k.com/blog/topic/automatic-escalation), [Plan Sponsor Requirements](https://www.dwc401k.com/blog/topic/plan-sponsor-requirements), [401(k) Q&A](https://www.dwc401k.com/blog/topic/401k-qa) ## **Facts** We have considered automatic enrollment for our 401(k) plan but have, thus far, decided not to implement it. However, for our employees that do sign up to defer, we would like to offer them a way to elect automatic deferral increases at set intervals throughout the year. ## **Question** Is it possible to simply add a box to our deferral election form for participants to select these automatic increases or do we have to amend our plan document to do that? ## **Answer** This is a bit challenging to answer in that it depends to a large degree on what your plan document says. Many prototype and volume submitter plan documents give the plan sponsor the authority to establish an administrative procedure (apart from the plan document) that governs the employee enrollment process, including making elections on how much to defer. If your plan is written that way, it is very likely that you can accomplish your objective via the deferral election form without amending your plan document. You wouldn’t be able to default participants into the automatic increases, but it doesn’t sound like that is what you are trying to do here. As long as participants have to opt in and are free to opt back out, then using the deferral election form should be acceptable. There are some practical limitations, however. One is that someone has to keep up with who has or has not signed up for the automatic escalations, and make sure the proper people get escalated at the proper time. If someone is missed or someone gets mistakenly escalated, it's an operational failure. The corrections for both are relatively easy, but they still take some time and effort which translates to cost and potential negative PR with employees. You definitely want to make sure you have solid internal controls in place before implementing something like this. For more information on plan sponsor requirements, visit our Knowledge Center [here](https://www.dwc401k.com/plan-sponsor-requirements).  [![Contact DWC](https://no-cache.hubspot.com/cta/default/3113501/db804091-e2fc-4489-9fcd-58164bf8756e.png)](https://cta-redirect.hubspot.com/cta/redirect/3113501/db804091-e2fc-4489-9fcd-58164bf8756e) - Share - [**](https://www.facebook.com/sharer/sharer.php?u=https://www.dwc401k.com/blog/does-adding-an-automatic-escalation-option-require-a-plan-document-amendment&title=Does%20Adding%20an%20Automatic%20Escalation%20Option%20Require%20a%20Plan%20Document%20Amendment?&picture=https://www.dwc401k.com/hubfs/Knowledge%20Center/Pillar%20Categories%202024/PNG%20-%20with%20category%20name/hero_401_png_category.png&description=Can%20we%20add%20a%20box%20to%20our%20deferral%20election%20form%20for%20participants%20to%20select%20elect%20automatic%20deferral%20increases%20or%20do%20we%20have%20to%20amend%20our%20plan%20document%20to%20do%20it) - [**](https://twitter.com/share?url=https://www.dwc401k.com/blog/does-adding-an-automatic-escalation-option-require-a-plan-document-amendment&hashtags=) ## Browse categories [ DWC Developments ](https://www.dwc401k.com/blog/topic/dwc-developments) [ Industry Insights ](https://www.dwc401k.com/blog/topic/industry-insights) [ Regulatory Round-Up ](https://www.dwc401k.com/blog/topic/regulatory-round-up) [ Cash Balance Corner ](https://www.dwc401k.com/blog/topic/cash-balance-corner) [ 401(k) Q&A ](https://www.dwc401k.com/blog/topic/401k-qa) [ Operational Overview ](https://www.dwc401k.com/blog/topic/operational-overview) [ Lessons from Litigation ](https://www.dwc401k.com/blog/topic/lessons-from-litigation) [ Pension Primer ](https://www.dwc401k.com/blog/topic/pension-primer) [ Browse by Topic ](https://www.dwc401k.com/knowledge-center-topics) ## Subscribe to our newsletter ### Only the Best Retirement Industry Content Get our 401(k) and defined benefits content delivered directly to your inbox. 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