If an automatically enrolled employee missed the deadline to opt out of your 401(k), they may be able to get a refund of their contributions. Here is how to check if they are eligible and how they can request one.
All Gusto 401(k) plans include automatic enrollment. We enroll your employees and start their contributions at the default deferral rate when your plan starts or when employees become eligible.
We generally send auto-enrollment notifications 30 days before an employee meets eligibility requirements. If your plan does not have a service requirement, we send the notification when the employee is hired.
If an employee missed the deadline to opt out, they may be able to request a refund of their contributions.
An employee is eligible for an auto-enrollment refund when both of these conditions are met:
Plan type: Your plan needs to include an eligible automatic contribution arrangement (EACA) or a qualified automatic contribution arrangement (QACA). Most Gusto 401(k) plans include one of these. Standard automatic contribution arrangement (ACA) plans are not eligible for auto-enrollment refunds.
Timing: The employee needs to request the refund within 90 days of their first automatic contribution.
Employees who want a refund need to complete the request in their Gusto Retirement participant dashboard. You can share these step-by-step directions with any employees who ask.
Requesting a refund automatically sets the employee's deferral election to 0%. The employee can opt back in at any time by signing in to their Gusto Retirement participant dashboard and increasing their contribution rate to greater than 0%.