NTSA Automatic Enrollment Guide Now Available

A new resource offering best practices for 403(b) non-ERISA plans is now available. Automatic Enrollment Guide: Best Practices for 403(b) Non-ERISA Plans, a comprehensive resource prepared by NTSA provides information relevant to all stages of providing this means of enrolling 403(b) participants.

The guide discusses why an employer may consider instituting auto enrollment, such as:

• increasing participation;

• saving an employer money through lower administrative cost and risk; and

• reducing burdens on taxpayers.

It also addresses what an employer should consider before adopting an auto enrollment plan, including:

• whether it is permissible in the employer’s locality and state;

• whether it would be appropriate for a particular employer’s employees;

• what features the employer wants an auto enrollment program to have;

• what the default investment option will be;

• what the default contribution percentage or dollar amounts will be;

• what type of automatic elective deferral will be deducted from participants’ pay; and

• who will approve disclosures to employees.

The guide also discusses advisor communications with participants before and after enrollment, and includes sample documents and forms. More information is available here.