Yesterday, the Wall Street Journal published an article about how businesses are jumping on the automatic enrollment bandwagon. In “Auto Enroll Retirement Plans Take Off”, Jillian Mincer reports that, in 2006, Fidelity experienced a 95% increase in automatic enrollment in plans it administers. (hat tip to the National Center for Policy Analysis.)
Even though automatic enrollment has been around for a number of years, the Pension Protection Act made automatic enrollment more attractive. Section 904 of PPA contains the new safe harbor automatic enrollment provisions, known as a qualified automatic enrollment arrangement (QACA). What makes automatic enrollment so attractive now is that if the employer sponsoring the plan implements the QACA provisions, the employer does not need to meet certain nondiscrimination requirements, including the ADP test.
Technorati Tags: automatic enrollment, pension protection act, PPA, QACA, ADP, participant, plan sponsor, plan document, pension, retirement, ERISA
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