Eligibility & Enrollment
By checking your eligibility requirements in your adoption agreement, and the definition of entry date. This is all found in section 3 of the adoption agreement. If your firm elected the one year of eligibility criteria, this also requires that the employee work 1,000 hours of service in that first year of employment.
Eligibility & Enrollment
When new participants enroll in your firm’s plan, you need to provide them with an Enrollment Package for New Participants. The enrollment package includes the forms and instructions they will need to make their decisions. For participants to enroll in your firm’s plan, they need to complete and return the necessary forms to you.
For information on opening a Self-Directed Brokerage Account (SDBA), see “Opening an SDBA” in Investment Election Changes & Transfers.
How to Enroll a Participant
You need to provide employees with an Enrollment Package for New Participants once they become eligible. The package includes helpful information on saving for retirement as well as information concerning the Program’s investment options, enrollment and beneficiary forms and the Participant Disclosures required by the Department of Labor (DOL).
In the interest of “going green,” the enrollment kit is available online (see the link above). The only item that needs to be printed is the Beneficiary Designation Form if the participant is naming someone other than a spouse as the sole primary beneficiary and, if the participant wishes to roll assets into the plan, a Rollover Certification Form.
You may be required to provide participants with additional materials, depending on your plan design. The following chart outlines the additional materials that may be required and the timeframes for providing them.
Plan Design 1:
The enrollment kit must include the plan and investment related Participant Disclosures (Disclosure of Plan-Related Information).
As required by the Department of Labor (DOL), the Participant Disclosures must be provided by the Plan Administrator to eligible employees on or before they can first direct their investments, and then annually thereafter.
Plan Design 2:
The plan has been amended to use a Qualified Default Investment Alternative (QDIA) as the default fund
The enrollment kit must include the QDIA notice
At least 30 days before eligibility or the first investment for the participant (The notice may be provided as late as the day of plan eligibility if the plan includes the “unwind” feature. See below.)
Plan Design 3:
The plan has been amended to use the Qualified Automatic Contribution Arrangement (QACA – the new safe harbor automatic enrollment), or the Eligible Automatic Contribution Arrangement (EACA)
Notices must be provided (the enrollment kit must include such notice if applicable)
As required by IRS Regulations, no later than 30 but no earlier than 90 days before the beginning of the plan year (or, in the case of an employee who becomes a participant during the plan year, by the day on which such employee becomes a participant, but not more than 90 days prior). (In the case of an EACA, the QDIA notice must also be included.)
Plan Design 4:
The employer intends to use the “unwind” (opt out) feature available under QACA and EACA
A form must be provided to let the employee elect to “unwind” an automatic contribution
If the employee wants to unwind the automatic contribution, he or she must do so within 90 days after the first automatic contribution
An attorney’s or staff member’s entry date will be one of the following, as selected in the plan’s adoption agreement:
- The first day coincident with satisfaction of the eligibility conditions,
- The first day of the first or seventh month of the plan year coincident with or next following satisfaction of the eligibility conditions (i.e., January 1 or July 1 for calendar year plans),
- The first day of the plan year quarter coincident with or next following satisfaction of the eligibility conditions are met (i.e., January 1, April 1, July 1 or October 1 for calendar year plans), or
- The first day of the month coincident with or next following satisfaction of the eligibility conditions.
When assisting the employee with the online enrollment process, you will need to provide the following:
- Six-digit Program number for your plan,
- Date of hire, and
- Entry date into the plan.