Automatic Enrollment

  1. Will typically default to “No” – change as necessary
  2. Specify the automatic enrollment type (ACA, EACA, QACA) as well as the starting percentage and who the auto enroll applies to (all employees, new hires, etc)
    1. Automatic (ACA):   No additional requirements beyond notice
    2. EACA:
      1. Must start at 6% or auto escalate to 6% within 3 year period; cannot exceed 10%
      2. Must apply to all employees
      3. Cannot start mid-year unless new plan
      4. EACAs are eligible for “give back” of $ to participants if they complain within specified period
      5. EACAs are eligible for 6 month period for ADP/ACP testing
    3. QACA:
      1. Are associated with safe harbor contributions
      2. Cannot start mid-year unless new plan and cannot start after October 1
      3. May apply 2 year vesting schedule to SHMatch or SHNE
      4. SHMatch contribution can be 100% to 1% and 50% to 6%
  3. Specify Effective Date for Auto Enroll – very important especially if rules are different for existing and new employees.
  4. Starting Percentage:  This is the initial auto enroll %.  Be sure to enter as .03 for 3%.
  5. Increase Percentage:  This applies only if the plan allows auto escalation within their auto enrollment rules (enter .01 NOT 1.00)
  6. Maximum Percentage:  This applies only if the plan has auto escalation and indicates where the auto escalation will stop (i.e. start at 6%, and escalate by 1% each year until participant reaches a maximum of 10% - enter .10 for 10%)
  7. Auto Escalate Date:  Specify the date each year (typically 1/1) when the plan escalates deferral percentages to the next percentage
  8. Delay Auto Increase for X days after Auto Enrollment:  
    1. 1 day:   this means that regardless of when they were initially automatically enrolled, they will escalate on the next escalation date. This will typically be less than a year (i.e. auto enrolled on 10/1/14 and escalated 1/1/15).
    2. 365 days:   This would mean that the plan wants people to stay at the initial auto enroll rate for at least a year and then escalate the following escalate date.  This will typically mean that they are actually at the initial rate for more than a year (i.e. auto enrolled on 10/1/14 and escalated 1/1/16).  
    3. Plans can choose other numbers as well but 1 and 365 would be the most common.
  9. Refund Auto Deferrals: Refer to document for correct choice.
  10. EACA 6 Month Extension:  If the plan is an EACA, select “Yes”.  This provision allows the plan 6 months to do the ADP/ACP testing
  11. Applicable Participants:
    1. Select the choice that applies to the plan.  
    2. VERY IMPORTANT to get this right – our auto enroll system will use this code to determine who to bring in to auto enroll and who to exclude.  
      1. If you select to auto enroll people with DOH after the effective date, then all current employees will be given an excluded status because their hire date is before the effective date
      2. If you say that people should be auto enrolled if their contribution rate is less than the auto enroll rate then that will exclude those that have a higher rate.  
      3. NOTE – the first auto enroll determinations will be made overnight as soon as the participant web is turned on.  If the web is turned on but you haven’t yet loaded existing contribution rates and your specs are set to auto enroll people if their rate is less than the auto enroll rate, then everyone will be auto enrolled because the system doesn’t know there are existing rates.  
      4. If you are taking over an existing auto enroll plan with existing auto enroll statuses, it is best to import that information into PC.  
      5. Options: 
        1. All Participants hired or rehired after the effective date
        2. All Participants regardless of existing salary reduction agreement as of the effective date
        3. All Participants who do not have an existing salary reduction agreement as of the effective date
        4. All Participants whose salary reduction agreement is less than the automatic enrolment rate as of the effective date
        5. All Participants with a plan entry date after the effective date

  1. On or After Date:  This date will typically equal effective date for auto enrollment.  But if the plan wants a special date to differentiate between new and existing employees, enter that date here
  2. Opt Out Frequency:
    1. Once: This means that once the participant opts out of auto enrollment, they forever opt out and aren’t subject to escalation provisions
    2. Annually: This would mean that each year the participant has to opt out again or be subject to the auto escalation.