3-13-56. Automatic enrollment feature.
380 words·~2 min read·
/sd/title-3/chapter-3-13/3-13-56A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The board may establish an automatic enrollment feature within the plan by rules promulgated pursuant to chapter 1-26 and § 3-13-54 . Any automatic enrollment feature established by the board shall include:
(1)A provision that automatic enrollment shall apply to newly-employed members hired after a specified future date, any state employees not contributing to the deferred compensation plan as of June 30, 2019, and employees of any other automatic enrollment unit that elects automatic enrollment for its employees not contributing to the deferred compensation plan;
(2)A provision that automatic enrollment shall apply only to the employees of those participating units that choose the automatic enrollment feature for the unit's employees;
(3)A provision that automatic enrollment may not require more than an established maximum contribution per month per automatically-enrolled participant;
(4)A provision that a participant who is automatically enrolled shall have as long as ninety days after the start of employment to discontinue participation in the plan;
(5)A provision that an automatically-enrolled participant who discontinues participation in the plan within ninety days of enrollment shall receive a refund of the participant's account within thirty days after discontinuing participation;
(6)A provision that the state investment officer shall select a default investment fund to receive contributions by any automatically-enrolled participant who does not choose an investment alternative to receive the participant's contributions;
(7)A provision authorizing participating units and the system to make contributions to the plan for the benefit of participants;
(8)A provision that the plan shall adhere to notice requirements to automatically-enrolled participants in accord with Internal Revenue Service Rulings 98-30 and 2000-8;
(9)A provision that automatic enrollment does not require advance authorization by a participant, which is hereby deemed to be an exception to the provisions of any state law requiring employee authorization for a payroll deduction or any similar ordinance of a local participating unit; and
(10)A provision that the amount of compensation deferred by an automatically-enrolled participant shall automatically increase by a specified amount each year unless the participant elects not to participate in automatic escalation or elects to defer a different amount than specified.
If a participant discontinues participation pursuant to subdivision (4), that act is a permissive withdrawal pursuant to § 414(w) of the Internal Revenue Code.