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Focus 12: Automatic Enrollment and Escalation Provisions '14
Presentor: Stephen Forbes Recorded Date: 6/16/2014 Duration: 60 Min.

This 3-part program was recorded during live presentations on June 16, 2014 at 12:00PM EDT.

All sessions will be recorded and available for purchase. Due to the inability to track attendance, however, a Letter of Participation is not provided for recorded events.


Focused Topic 12: Automatic Enrollment and Escalation Provisions
Mondays with Derrin and Steve

Automatic enrollment provisions are becoming increasingly more popular as consultants and investment advisors encourage plan sponsors to add such provisions. Advisors and consultants are also encouraging the use of automatic escalation features. Evidence shows that such provisions increase plan participation and deferral rates.

The use of such provisions, however, places increased responsibilities on HR departments of plan sponsors and administrators. Accordingly, it is imperative that practitioners not only understand the rules completely but also be able to explain them to plan sponsors effectively. And, it is important that the plan follow the rules carefully because mistakes can be costly. The automatic escalation provisions are particularly difficult because consultants are creative in their designs.

It has been a number of years since the final regulations dealing with automatic enrollment were issued. Under the final regulations, employers have more options than ever before with ACAs, EACAs, and QACAs. While employers now have options, they are still confused about the benefits and requirements of EACAs, QACAs and ACAs. In this presentation, the speaker discusses the requirements and benefits of each of the different types of automatic enrollment plans and automatic escalation provisions, as well as the correction of failure to properly implement such provisions.

Topics include:

  • Automatic contribution arrangements (ACAs)
    • State law protection
    • ERISA notice requirements
    • Tax notice requirements
  • Non-statutory automatic enrollment
  • Eligible Automatic Contribution Arrangements (EACAs)
    • Expanded eligibility
    • Eligibility options
    • Notice content and timing
    • Permissible withdrawals
    • ADP testing delay
  • Qualified Automatic Contribution Arrangements (QACAs)
    • Minimum deferrals
    • Safe harbor notice content and timing
    • Effect of leave of absence
    • Employer contributions
    • Uniform rates
    • Benefits
  • Automatic escalation provisions
    • Design options
    • Notice requirements
  • Correction of automatic enrollment failures

    Prerequisites: There are no prerequisites and no advance preparation required for this program. However, the instructor assumes participants have a basic familiarity with 401(k) plans, including classic safe harbor plans.

    Level: Intermediate

    Instructional Delivery Method
    Group – Internet-Based

    Speaker - Stephen W. Forbes, J.D., LL.M.
    Author of The 5500 Filing Guide


    1. Identify when ACAs, EACAs, or QACAs are an appropriate plan design, and the conditions associated with each automatic enrollment feature
    2. Design and administer non-statutory automatic enrollment provision
    3. Design and administer an EACA provision
    4. Design and administer a QACA provision
    5. Apply properly an automatic escalation provision
    6. Determine whether the automatic contributions provision provides the ability to delay ADP testing penalty-free
    7. Determine whether the automatic contributions provision permits a participant to withdraw amounts penalty-free from their plan

    How To Participate
    You will need a phone (speakerphone, for multiple participants sharing the Primary registrant’s authorized connection) and Internet Access. The graphics presentation and illustrations will be viewed via the Primary registrant’s Web connection, while the speaker audio portion will be via the Primary registrant’s telephone.

    Select the "Fees" link on the right side menu of this page for more information about who is authorized to connect to the program, and for the cancellation/transfer policy.

    Program Schedule (Eastern Time)
    Monday, June 16, 2014
    12:00 noon to 1:00 p.m. Eastern Time
    (11:00 a.m. CT; 10:00 a.m. MT; 9:00 a.m. PT)

    Program related requests, questions, or concerns may be e-mailed to: