an arrangement described in section 408(p), any employee who is not required to be eligible to participate in the arrangement under section 408(p)(4), and (vii) in the case of an employer that maintains a simplified employee pension described in section 408(k), any employee who is permitted to be excluded from participation under section 408(k)(2). (4) Guidance The Secretary shall issue regulations or other guidance to carry out this subsection, including— (A) guidelines for determining the classes or categories of employees to be covered by an automatic IRA arrangement, (B) if an employer excludes employees from the automatic IRA arrangement, guidelines providing that the employer shall specify the classification or categories of employees who are so excluded, and (C) rules to prevent avoidance of the requirements of this section. (d) Automatic IRA arrangement For purposes of this section— (1) In general The term automatic IRA arrangement means an arrangement of an employer (determined without regard to whether the employer is required to maintain the arrangement)— (A) which covers each qualifying employee of the covered employer for the calendar year, (B) under which a qualifying employee— (i) may elect— (I) to contribute to an individual retirement plan, or to purchase a qualified retirement bond on behalf of the employee, by having the employer deposit payroll deduction amounts or make other periodic direct deposits (including electronic payments) to the plan or to be invested in retirement bonds (whether to the Secretary of the Treasury or to a designated trustee or other agent for that purpose), or (II) to have such payments paid to the employee directly in cash, (ii) is treated as having made the election under clause (i)(I) in the amount specified in paragraph (4) until the individual specifically elects not to have such contributions or purchases made (or specifically elects to have such contributions or purchases made at a different percentage or in a different amount), and (iii) may elect to modify