IRS Issues Proposed Rules and Sample Notice Regarding Automatic Enrollment Arrangements
The Internal Revenue Service (“IRS”) has issued proposed regulations on the requirements for automatic enrollment arrangements, permitted by the Pension Protection Act of 2006 (the “PPA”), with respect to 401(k) plans, 403(b) plans, and 457(b) governmental plans. These arrangements first become available for plan years starting on or after January 1, 2008. In addition, to assist plan sponsors in satisfying the notice requirement contained in the proposed regulations, the IRS has posted a sample automatic enrollment notice on its web site. This new guidance and model form will help employers adopt and set up these arrangements at the earliest possible time.