Saturday, January 17, 2009

Automatic Enrollment 401(k) Plans for Small Businesses

The DOL and IRS announced the release of a new publication to help small employers understand 401(k) automatic enrollment:

Washington – The U.S. Department of Labor and the Internal Revenue Service (IRS) today released a new publication to help small employers understand automatic enrollment for 401(k) plans offered to their employees. Automatic Enrollment 401(k) Plans for Small Businesses provides a comprehensive overview of the advantages of starting and operating this type of 401(k) arrangement.

With 401(k) plans serving as the primary source of retirement income for millions of Americans, automatic enrollment will play an important role in helping them save and invest for their retired years. This publication describes an automatic enrollment 401(k) plan, how to set up the plan, management of the plan, fiduciary responsibilities and a checklist to ensure compliance with the law.

"Today, there are many retirement plan options available to small employers. The automatic enrollment 401(k) plan offers small business owners a way to help more of their employees save for retirement," said Bradford P. Campbell, assistant secretary of labor for the Labor Department's Employee Benefits Security Administration (EBSA).

This publication is part of the agency's ongoing education campaign to educate employers, particularly small businesses, and help workers and their families to save for a financially secure retirement.

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