Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
No
Explanation:
State laws require written consent for wage deferrals, preventing automatic enrollment for voluntary retirement plans unless it is collectively bargained.
Relevant State Laws – Minn. Stat. Ann. § 181.06, § 352.965
State general wage deduction law permits employers and employees to enter into a written contract wherein the employee authorizes the employer to make payroll deductions for one of a list of enumerated benefits, including group annuities and payments made to a Minnesota benefits association, or employee stock purchase plan or savings plan. Minn. Stat. Ann. § 181.06
Minnesota’s statute establishing the Minnesota Deferred Compensation Plan also provides that amounts may be deferred at the request of an officer or employee of the state, or an officer or employee of a political subdivision; and such amounts must be as provided for in an agreement between the officer or employee and the plan sponsor. Minn. Stat. Ann. § 352.965