Retirement and Benefit Solutions for Tax-Exempt Organizations

The recently passed Pension Protection Act created a blanket protection from any state anti-garnishment laws for any ERISA employer interested in implementing the auto-enrollment feature in their defined contribution plan. Non-ERISA plans were not covered by this Federal Act and can still be prevented from implementing auto-enrollment in states that have anti-garnishment laws.

Anti-garnishment laws are a valuable and important protection for many American workers. However, depending on the extent of your state’s anti-garnishment laws, or the interpretation of them, many Non-ERISA plan providers are reluctant to improve their defined contribution plan by implementing an auto-enrollment feature. We encourage Non-ERISA plan sponsors interested in auto-enrollment to check their own state statutes to determine if any anti-garnishment laws exist.

For those employers that find themselves in a state that has anti-garnishment laws and want to help change state statutes to allow for auto-enrollment we offer you the following two documents:

1. Sample letter you may use and edit to communicate with your state elected officials on your interest in correcting the law to allow for auto-enrollment
2. Copy of the recently passed State of Kansas legislation that make an exception in their state’s anti-garnishment laws for the purpose of implementing auto-enrollment.

To speak to a Fidelity representative in more detail about how we can help you, please call 1-866-733-1192. Thank you!

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 100 Summer Street, Boston, MA 02110

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