In the 401(k) context, a deferral rate (also referred to as contribution rate) is the portion of your wages automatically deducted from your paycheck and invested in your 401(k) account each pay cycle. So, if your deferral rate is set to 4%, for example, 4% of every paycheck will be automatically invested in your 401(k) account for retirement.
So what’s a default deferral rate?
Your Guideline 401(k) includes an automatic enrollment feature, which means that you’re automatically enrolled in your employer’s 401(k) plan if you’re eligible to participate. When you’re auto-enrolled, your plan’s default deferral rate will be applied.
The default deferral rate is determined by your employer and is applied to all participants who are automatically enrolled in the plan – that is, anyone who hasn’t completed enrollment and selected their own deferral rate or didn’t opt out by the deadline.
I was automatically enrolled. Can I change the default deferral rate?
If you were automatically enrolled at your plan’s default deferral rate, you have the ability to make changes any time at my.guideline.com or opt-out. Changes will take effect the next time your company payroll is run.