Church Plans and Automatic Arrangements

Q. Can church plans have automatic enrollment and automatic contributions?

A. Section 336(c) of the PATH Act allows church plans under Internal Revenue Code Section 414(e) to have an automatic contribution arrangement. Section 336(c) supersedes any state law relating to wage, salary or payroll payment, collection, deduction, garnishment, assignment or withholding that restricts the ability of a church plan to have an automatic enrollment feature.

This PATH Act provision, the IRS says, generally equalizes the availability of the automatic enrollment feature for church and conventional private-sector retirement plans by preempting state laws that directly or indirectly restrict automatic contribution arrangements for church retirement plans.