Download automatic enrollment under irs revenue ruling 98-30

AUTOMATIC CONTRIBUTION ARRANGEMENT
ANNUAL DISCLOSURE
SAMPLE
This specimen document has been provided to you to assist you in complying with the annual participant
notice for an Automatic Contribution Arrangement (ACA) that intends to comply with the Qualified
Default Investment Alternative regulations. This sample notice is not intended as tax or legal advice.
Modifications may be required to meet your particular needs. Please consult with your plan’s tax advisor
and legal counsel regarding the particular circumstance of your plan.
[Timing of Notice: Generally, the annual notice requirement is satisfied if the
annual notice is provided at least 30 days but not more than 90 days before each
plan year.]
Upon commencement of your employment with [insert name of company] and
satisfaction of the eligibility requirements, you were automatically enrolled in the [insert
name of 401(k) retirement plan] (the “Plan”). A notice describing this arrangement was
provided to you at that time.
Contributions to the Plan
Employee Elective Deferrals - Each year an amount equal to [insert percentage] is being
deducted from your paycheck on a before-tax basis and contributed to the Plan on your
behalf [insert frequency, e.g., payroll period, monthly, bi-weekly, etc.]
[If the Plan provides for matching contributions include this paragraph]:
Employer Matching Contributions - The Plan also provides for matching contributions.
The [insert name of company] matches [insert percentage] of your elective deferral
contributions up to a total of [insert percentage] of your compensation [insert frequency
e.g. payroll period, monthly, bi-weekly, etc.)]
In order to meet your retirement planning goals, please review the amount of your
elective deferral contributions. You may modify the percentage of amounts being
deducted from your paycheck and contributed to the Plan (including reducing the amount
to zero), by contacting [insert name of person or department responsible at the
employer’s office for responding to participant inquiries along with the telephone
number].
Investment of Contributions
If you have not elected otherwise since the time of your enrollment in the Plan,
contributions that were made for you continue to be invested in the [insert the name of
the default fund] (the default fund). You may select investment funds other than the
default fund and obtain information regarding the other investment funds available under
the Plan online at ingretirementplans.com or by calling the ING Customer Contact Center
at 800-584-6001. Please note that changes to the investment of ongoing contributions
must be made separately from changes to existing assets in your account.
[IN ADDITION TO THE IMPORTANT NOTICE ABOVE ON AN AUTOMATIC
CONTRIBUTION ARRANGEMENT, THE SAMPLE NOTICE BELOW SHOULD
BE SENT TO INFORM PARTICIPANTS OF YOUR DECISION REGARDING
THE QUALIFIED DEFAULT INVESTMENT ALTERNATIVE.]
QUALIFIED DEFAULT INVESTMENT ALTERNATIVE (QDIA)
ANNUAL DISCLOSURE
SAMPLE
This specimen document has been provided to you to assist you in complying with the final Qualified
Default Investment Alternative (QDIA) regulations. This notice is not intended as tax or legal advice.
Modifications may be required to meet your particular needs. Please consult with your plan’s tax advisor
and legal counsel regarding the implications of adopting this program and the contents of this notice.
[Timing of Notice: The annual notice requirement is satisfied if the notice is
provided to participants invested in a QDIA within a reasonable period of time of at
least 30 days in advance of each plan year.]
[Describe the circumstances under which the QDIA will be used (e.g. automatic
enrollment, a rollover received with no investment direction, elimination of a fund
from the plan, etc.). The QDIA may be used in any situations where the employee
had the right to direct investment but failed to do so.
Investment of Contributions
The [insert name of company] sponsor of [insert name of 401(k) retirement plan] (the
“Plan”) has chosen a default investment fund intended to satisfy Department of Labor
regulations on Qualified Default Investment Alternative funds for participants who have
not provided investment direction. If you have not elected otherwise since the time of
your enrollment in the Plan, contributions that were made for you on or after [insert the
date QDIA began, which may not be earlier than December 24, 2007], continue to be
invested in the [insert the name of the default fund]. [Insert a description of the fund,
the investment objectives, risk and return characteristics, fees and expenses associated
with the fund.] You may select investment funds other than the default fund and obtain
information regarding the other investment funds available under the Plan online at
ingretirementplans.com or by calling the ING Customer Contact Center at 800-584-6001.
Please note that changes to the investment of ongoing contributions must be made
separately from changes to existing assets in your account.
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[Include this paragraph if the default fund used for contributions made prior to and
including December 23, 2007 was a stable value fund as defined under the Qualified
Default Investment Alternative regulations.]
Any contributions credited to your participant account prior to and including December
23, 2007, for which you made no investment selection, are invested in the [insert the
name of the default fund] which for purposes of these contributions will be treated as a
Qualified Default Investment Alternative (QDIA) based on Department of Labor
regulations. [Insert a description of the fund and the investment objectives, risk and
return characteristics, fees and expenses associated with the fund.]
[Include this paragraph if the default fund used for contributions made prior to the
date the plan began complying with QDIA was not a stable value fund and all
contributions defaulted prior to the QDIA compliance start date will remain in that
fund.] Contributions credited to your participant account prior to [insert QDIA start
date], for which you made no investment selection, were invested in the [insert prior
default fund name] and those contributions will remain in the [insert fund name] until
you direct those amounts to be invested in a different fund option offered under the plan.
Please see Transfers out of the Default Fund below for further information on transferring
your funds.
[Include this paragraph if the contributions defaulted prior to the date QDIA
compliance began were transferred to the QDIA default fund.] Contributions
credited to your participant account prior to [insert QDIA start date], for which you made
no investment selection, were invested in the [insert prior default fund name]. Those
contributions were transferred to [insert QDIA fund name] as described under
Investment of Contributions above, as of [insert date] unless you previously directed
those amounts to remain in the [insert prior default fund name] or be transferred to a
different fund option offered under the plan. If you wish to transfer your prior defaulted
contributions to another fund offered under the plan please see Transfers out of the
Default Fund below for further information on transferring your funds.
Transfers out of the Default Fund
You have the right to transfer your assets out of the default fund to any other fund offered
under the Plan [insert frequency - must be at least as frequently as provided under the
Plan, but no less than once in any three-month period]. [Insert description of any
restrictions fees or expenses associated with the transfer. Note that certain types of
fees may not be assessed during the first 90 days of a QDIA investment. See Qualified
Plan News (QPN) 2007-16 available on the ING Sponsor Website under Information
Center>Regulatory Update>Corporate Market>Qualified Plan News.] You may initiate
a transfer or request a list of the investment funds available and additional information
regarding those funds online at ingretirementplans.com or by calling the ING Customer
Contact Center at 800-584-6001.
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