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FAQs - Auto Enrollment - What notice do I need to provide to employees for an EACA or QACA?

The notice must be comprehensive and sufficiently accurate to inform employees of their rights and obligations under the retirement plan’s particular type of automatic contribution arrangement and must be understandable by the average employee.

An EACA notice must contain an explanation of the following:

  • the plan’s default percentage rate for automatic enrollment contributions;
  • the right to not participate;
  • how to elect to not participate;
  • how to elect to contribute an amount different from the plan’s default percentage rate for automatic enrollment contributions;
  • how to make an investment election, if permitted by the plan;
  • how automatic enrollment contributions will be invested in the absence of an employee’s investment election, if the plan permits employees to elect investments; and
  • if allowed by the plan, how and when to withdraw any automatic enrollment contributions.

A QACA notice must explain the following:

  • the plan’s default percentage rate for automatic enrollment contributions, including the amount and timing of any increases;
  • the type and amount of the employer contributions;
  • the right to not participate;
  • how to elect to not participate;
  • how to elect to contribute an amount different from the plan’s default percentage rate for automatic enrollment contributions;
  • how to make an investment election, if permitted by the plan; and
  • if the QACA contains two or more investment options, how automatic enrollment contributions will be invested in the absence of an employee’s investment election.

In addition to the IRS’s requirement as to what an employer must include in the EACA or a QACA notice, the employer may also be required to provide additional information to an employee under the Department of Labor’s rules.

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