All Gusto 401(k) plans include automatic enrollment, which means eligible employees are automatically signed up unless they opt out or choose their own contribution rate. This article explains how the enrollment process works, what employees experience, and how to troubleshoot common invitation issues.
Automatic enrollment is a 401(k) plan feature that encourages all eligible employees to take advantage of their retirement benefits. All Gusto 401(k) plans include an automatic enrollment provision.
With automatic enrollment, eligible employees will automatically be enrolled at your plan's default deferral rate unless they take one of the following actions before their enrollment deadline:
Opt out: If an employee does not want to participate in the plan, they need to manually opt out before their enrollment deadline.
Self-enroll: If an employee would prefer to set their own contribution rate, they can self-enroll in their account.
If your plan includes automatic escalation, the deferral rate for automatically enrolled employees increases by 1% at the start of each subsequent year until it reaches between 6% and 15% (depending on your plan document terms). Automatic escalation does not apply to employees who opt out or self-enroll.
When the plan begins, or an employee becomes eligible, they get an email invitation to enroll in the 401(k) plan. The email includes:
Their auto-enrollment deadline
Your plan's employer matching rate (if applicable)
Links to important plan documents and our Help Center
From the invitation, employees can select the enrollment link and be guided through a simple setup process — including choosing their contribution rate and portfolio preferences.
Employees who do not wish to participate can select the I don't want to participate link in the email. They need to then create an account and affirmatively opt out in their participant dashboard.
Even employees who opt out need to create an account. They remain plan participants and may still get employer contributions, like profit-sharing or non-elective contributions. Creating an account also gives them access to plan information and lets them choose investment options for any applicable employer contributions.
Employees who take no action will be automatically enrolled at the plan's default deferral rate on the first pay date after their auto-enrollment date. Their assets will be invested in a Gusto Investment Services-managed portfolio based on their age and estimated timeline to retirement.
When employees receive their invitation depends on whether your plan is new or already up and running.
New plans
Employees will get their invitation 30 days before your plan's start date, as long as they meet your plan's eligibility requirements on or before that date.
Ongoing plans
Employees get their invitation within 24 hours of their eligibility date and have about 30 days to enroll or opt out — unless their prior contributions from a previous provider were carried over. If new employees are eligible immediately upon hire, their hire date is their eligibility date.
The auto-enrollment date is clearly listed in each employee's invitation email. If an employee makes a deferral election other than 0%, contributions may begin before that date, depending on your payroll schedule.
To check whether employees received enrollment emails, follow these steps.
Sign in to Gusto and go to Benefits. Under Savings, find 401(k) and select View, then select Manage 401(k)
Sign in directly at the Gusto Retirement sign-in page.
Once you're in your 401(k) administrator dashboard, follow these steps:
Go to Roster.
Check the Description column to see the date an invitation was or will be sent.
If an employee has not yet claimed their account, you can resend their invitation. To resend invitations, follow these steps.
Sign in to your administrator dashboard.
Go to Roster.
From there, you have two options:
In bulk: Select Resend Invitations above the roster list
For a specific employee: Find the employee in your roster, select Manage in the Description column, then select Send Invitation
If an employee has already claimed their account, you cannot resend an invitation. They should sign in directly or use the password reset option if they are having trouble accessing their account.
If an employee reports not getting their invitation, check the following.
Check eligibility first: Confirm that the employee meets your plan's age and length-of-service requirements. You can see an employee's eligibility status and the date they will become eligible in the Roster tab of your 401(k) administrator dashboard.
Verify the email address: If the roster shows the invitation was sent but the employee did not get it, confirm the correct email address is on file.
Check spam: Ask the employee to check their spam or junk folder.
Contact IT: If the email address is correct and the invitation is not in spam, ask your company's IT department to add retirement.gusto.com to the “safe senders” list.