The Internal Revenue Service (IRS) has posted a sample "Automatic Enrollment Notice" online to help plan sponsors satisfy requirements under proposed regulations issued in the fall on new safe-harbor qualified automatic contribution arrangements (QACAs) under Internal Revenue Code Section 401(k) (13) and on eligible automatic contribution arrangements (EACAs) under Code Section 414(w).
"A plan sponsor's notice must be sufficiently accurate and comprehensive to apprise employees of their rights and obligations under the plan sponsor's particular arrangement and must be written in a manner calculated to be understood by the average employee to whom the arrangement applies," the IRS states. "Also, the notice must be provided so that employees have a reasonable period of time after receipt of the notice before automatic elective contributions are made to the plan."
"A plan sponsor will need to add to, subtract from, or otherwise change the sample notice to the extent a plan's form and operations differ from the hypothetical QACA described in the sample notice, so that the actual notice accurately reflects the provisions of the plan," IRS explains.
To download the sample notice, visit www.irs.gov and type "sample automatic enrollment notice" in the search box.