What is a Negative Enrollment Election?
Negative election is a means of enrolling employees in a qualified plan that requires them to elect not to participate. So, the employer automatically enrolls all eligible employees, and then offers a time period for them to withdraw from the plan. This technique is commonly practiced among many of the largest employers in the U.S. and has been deemed acceptable by the U.S. Dept. of Labor. In addition negative elections can enable Highly Compensated Employees (HCE) of employer-sponsors to contribute more often to their own plan accounts, because it can help enable a plan to pass its non-discrimination tests more easily.
Related Questions
- My work contract does not require me to work during the summer months. Can I still submit my 2nd Election Enrollment Form while on summer break?
- Is it possible when including a negative or automatic enrollment provisions to include automatic increases in contributions annually?
- What is a Negative Enrollment Election?
