Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
Partially
Explanation:
State and political subdivision employees hired after June 30, 2007 who participate in the state plan are automatically enrolled. However, political subdivisions are not allowed to automatically enroll participants in their own plans due to state law.
Relevant State Law – Ind. Code Ann. §5-10-1.1-3.5, §5-10-1.1-7
Indiana requires automatic enrollment in the state’s deferred compensation plan for state employees hired after June 30, 2007, unless the employee elects otherwise. “For automatic contributions made after June 30, 2013, the initial contributions shall equal the greater of: (1) the maximum match provided by the state; or (2) two percent of the employee’s base salary. Each year thereafter, the contribution will be increased by a half percent annually up to a maximum of five percent.” Ind. Code Ann. § 5-10-1.1-3.5
Indiana’s statute permitting political subdivisions to establish deferred compensation plans provides that“[p]articipation shall be by written agreement between each employee and the governing body of the political subdivision.” Ind. Code Ann. § 5-10-1.1-7