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What are the Advantages, Disadvantages & Guidelines for an Auto-Enroll 401(k) Plan?

The primary benefit of an auto-enroll 401(k) plan is the potentially improved results of the ADP and ACP testing in a plan that does not include Safe Harbor provisions. Typically, the plan will automatically enroll employees once they are eligible based on the plan document provisions. An “Eligible Automatic Enrollment Arrangement (EACA)” does not require employer contributions.

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