Topic Archive: Automatic Enrollment

Are We Required to Make Safe Harbor Contributions for HCEs?

DWC | 10/22/19

Facts

My company sponsors a safe harbor 401(k) plan so that all of the highly compensated employees can maximize their deferrals without worrying about failing the ADP test each year.  Although we fully intend to make the same level of contribution for the HCEs that we do for the non-HCEs, we would prefer to not to be required to do so in order to maintain flexibility with our cash flow.

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Is There a Plan Design that Combines the Benefits of Automatic Enrollment and Safe Harbor?

DWC | 10/15/19

Facts

My company sponsors a 401(k) plan, and we fail the annual ADP test pretty consistently.  We really want to increase participation; not only to help our test results, but also to encourage our employees to save for retirement.  Automatic enrollment would help with participation, but we would have to set the default rate too high in order for it to solve our testing problem.

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Can Automatically Enrolled Participants Who Forgot to Opt Out Withdraw Their Deferrals?

DWC | 10/8/19

Facts

We are thinking of adding automatic enrollment to our 401(k) plan.  One of our concerns, however, is that we might end up with a bunch of tiny account balances for participants who forget to opt out until they see their first paycheck with automatic deferrals taken out.

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What is Automatic Enrollment and How Does it Work?

DWC | 09/17/19

Facts

Our company sponsors a 401(k) plan, but very few of our participants are contributing.  We started the plan as an added benefit to help attract and retain employees, but we also truly want to encourage our employees to save for retirement.  I’ve heard a lot about something called automatic enrollment and how it can be a great tool to get people to save, but I really don’t know much more about it.

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Decoding the Alphabet Soup: What's With All the Acronyms? | Part 2

DWC | 08/14/18

Facts

People in the retirement plan business sure do like their acronyms.  All these letters get thrown around, and I do not know what half of them mean.

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Decoding the Alphabet Soup: What's With All the Acronyms? | Part 1

DWC | 07/24/18

Facts

People in the retirement plan business sure do like their acronyms.  All these letters get thrown around, and I do not know what half of them mean.

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Does Adding an Automatic Escalation Option Require a Plan Document Amendment?

DWC | 08/22/17

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.

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