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Are you saying that (in your example), the QACA contribution for 2025 has a 2 year vesting schedule and the QACA contribution for 2026 has a separate 2 year vesting schedule? Because if you are, that’s wrong and vesting like that hasn’t been allowed since the 80’s.

Someone 25 years ago introduced the concept of "class year vesting" to newbie me, and already as not allowed.

Isn't this just a BRF issue with separate vesting schedules for different groups of employees based on hire date?

It sounds like you have a change in vesting schedule. That is employees hired before X are 100% vested, people hired after X are subject to 2 year cliff. If you meet the rules you should be fine. If the plan was setup initially to favor HCE with the immediate vesting then shortly after or concurrently with initial adoption changed to the 2 year schedule for folks hired afterwards, you probably have BRF problem with respect to your timing. if the plan has been running awhile and they switched to 2 schedule, shouldn't be a problem.

When was the deposit made? Can you count <$50 towards 2024? Also what limit was exceeded? The fix might be different depending on which limit was exceeded.

no, I was saying all QACA contributions for 2024 would be 100% vested regardless of the participant's vesting service. All QACA Contributions for 2025 and future would be regular 2 year vesting overall, not per year. I was just trying to explain that the buckets that vesting is applied to is by money, not group of employees. Better example: If a discretionary employer contribution provision changed vesting from 100% immediate, to 6 year graded, to 3 year cliff over the course of several years, depending on how it is written the plan could end up with a bucket that is 100% vested, a bucket that is 6 year graded, and a newest bucket that is 3 year cliff. After each change, all the new contributions would be in a new bucket together with the new vesting schedule, until the plan is amended to change the vesting again the future, and then a new bucket would be tracked. I agree, I would NOT do it by year and apply the vesting separately to each year specifically, that is terrible and I haven't see it in decades.

There can be reasons for a participant in an employment-based retirement plan to prefer it over an Individual Retirement Account. Among them, opportunities for guarding a retirement asset from some kinds of creditors’ claims might be better with an employment-based plan (even if not ERISA-governed) than an IRA. This might be so not only under bankruptcy law, but also under other laws. As CuseFan suggests, there is no shortcut; one must get into the details of those laws and how they might apply to facts and circumstances the individual plans against. The individual might want not only legal advice but also practical advice across her whole team of advisers, including lawyers (for each topic), certified public accountant, physician, actuary, financial planner, investment adviser, and TPApril. This is not advice to anyone.

You're overthinking it. Nothing in SECURE 2 says that top heavy is "tested separately" and to be honest I don't know where this common misunderstanding is coming from. The top heavy determination is still done based on all participants in the plan. There is no disaggreation for determining the top heavy ratio. What section 310 of SECURE 2 says is that, for plan years starting in 2024 and later, otherwise excludable employees no longer have to receive the defined contribution top heavy minimum. That's it.