If the plan uses an eligible automatic contribution arrangement or a qualified automatic contribution arrangement, the employer must notify all employees who are eligible to participate in the arrangement 30 - 90 days before each plan year begins. For plans that automatically enroll employees immediately when they¡¯re hired, an employer may give employees the notice on their date of hire. If it¡¯s impractical to give the notice to an employee before they¡¯re eligible to be in the plan, the plan can still meet the notice timing requirements by:
- giving notice to the employee before the pay date for the pay period in which the employee becomes eligible; and
- allowing the employee to make deferrals from any compensation he or she received after becoming eligible.
In addition to the IRS¡¯s requirements as to the timing of the notice, the plan should consult the rules for any additional requirements.