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FAQs - Auto Enrollment - When can I deduct automatic enrollment contributions from my employee's wages?

An employer cannot deduct any automatic enrollment contributions from an employee’s wages until that employee has a reasonable time to make an affirmative election after receiving notice. An affirmative election means that the employee has decided not to participate in the automatic contribution arrangement or to contribute an amount different from the plan’s default percentage rate.

The regulations for qualified automatic contribution arrangements require that automatic enrollment contributions must begin to be deducted from an employee’s wages no later than 30 days after the notice is provided or the pay date for the second pay period beginning after the notice is provided, whichever is earlier.

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Page Last Reviewed or Updated: 19-Aug-2013