---
title: "Automatic Enrollment for 401(k) Plans – Retirement Plan Update April/May"
date: 2015-04-02
author: "Site Admin"
featured_image: "https://pinnacle-plan.com/wp-content/uploads/2015/04/Plan-Design-Icon.avif"
categories:
  - name: "Newsletters"
    url: "/category/newsletters.md"
---

# Automatic Enrollment for 401(k) Plans – Retirement Plan Update April/May

[![Automatic Enrollment for 401(k) Plans](http://pinnacle-plan.com/wp-content/uploads/2013/03/Plan-Design-Icon.png)](http://pinnacle-plan.com/wp-content/uploads/2013/03/Plan-Design-Icon.png)View This Newsletter: [Automatic Enrollment for 401(k) Plans](http://pinnacle-plan.com/wp-content/uploads/2015/04/2015-Benefit-Insights-April-May1.pdf)

Overview:

- Automatic Enrollment for 401(k) Plans 
    - Popularity of auto-enroll
    - Separating hyperbole from helpful
- What is Automatic Enrollment? 
    - Opt-in vs. Opt-out
    - Automatic escalation
- Eligible Automatic Contribution Arrangement (EACA) 
    - Two special features 
        - Deadline extension for corrective refunds
        - 90 day grace period to withdraw automatic deferrals
- Qualified Automatic Contribution Arrangement (QACA) 
    - Combines safe harbor 401(k) features with auto-enroll 
        - Passes testing
    - Required minimum employer contributions 
        - Non-elective profit sharing vs. matching contributions
- “Generic” Automatic Enrollment 
    - Greatest flexibility
    - No special features
- Why Automatic Enrollment? 
    - Prevent a Testing Failure 
        - Effect of auto-enroll on ADP Test
    - Help employees accumulate meaningful retirement savings 
        - Small automatic deferrals not enough to retire on, but better than nothing
        - Creates a culture of savings

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Pinnacle Plan Design is a third-party administrator (TPA) for employer-sponsored qualified retirement plans. We specialize in retirement plan design, administration and actuarial consulting for 401(k)/profit-sharing plans, defined benefit plans, cash balance plans, and 403(b) plans. Pinnacle Plan Design proudly serves businesses nationwide.