FAQs - Auto Enrollment - What notice do I need to give 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 automatic contribution arrangement and
  • understandable by the average employee.

An EACA notice must contain an explanation of the following:

  • the plan’s automatic enrollment contributions default percentage rate;
  • 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 if the employee doesn’t elect investment options, if the plan permits employees to elect investments; and
  • if the plan allows, 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 the plan permits this; and
  • if the QACA contains two or more investment options, how the plan will invest automatic enrollment contributions if the employee doesn’t elect investment options.

The employer may also be required to provide additional information to an employee under the Department of Labor’s PDF rules.

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