Question

Which of the following is true regarding negative elections? A negative election is a provision whereby the employee is deemed to have elected a specific deferral unless the employee specifically elects out of such election in writing. Negative elections are no longer approved by the IRS. When an employer includes a negative election in its qualified plan, the employer must also provide 100% immediate vesting. a.1 b. 1&3 c. 2&3 d. All the above

Answer 1

Answer:

The correct answer is letter "A": 1.

Explanation:

The negative election is a systematic choice made by employers regarding the employees' 401k retirement accounts. It requires the administrators to enroll their subordinates in a plan they must elect but not participate. Thus, the employer enrolls the workers in a given plan and then the employees are offered to be withdrawn from the plan after a period of time.