Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
Partially
Explanation:
Employee deferrals to defined contribution plans at the state level must be made in writing, preventing automatic enrollment for state employees. However, the state does not have a general law against wage deferrals, and the City of Milwaukee has implemented automatic enrollment.
Relevant State Laws – Wis. Stat. Ann. § 40.82, Revised Master Agreement for the City of Milwaukee 457(b) Plan
Statute establishing the state’s deferred compensation plan authorizes withholding “made pursuant to a contract between an employer and an employee.” Wis. Stat. Ann. § 40.82
“The Common Council wishes to amend the plan to… (iv) implement a procedure whereby (a) employees may be enrolled by default into the plan absent affirmative elections by an employee at a fixed percentage of compensation, to be initially set at 3% with discretion in the board to increase such percentage at a later date beginning no earlier than 2017, such increase in no event to exceed 5%” Revised Master Agreement for the City of Milwaukee 457(b) Plan