QACA Uniformity

[Guest Statler]

I am hoping for an additional opinion on this issue since I have now had more than one client want to do this.

Plan is setting up a QACA. They have monthly entry dates and increases would take place at the beginning of the year. For employees that are automatically deferring starting prior to 7/1, they want to increase during the initial period (For an employee entering 2/1/10, they would increase 1/1/11). For employees that are automatically deferring starting after 7/1, they want to wait until the end of the full initial period until they are increased (For an employee entering 8/1/10, they would increase 1/1/12). The individual increase schedules would meet the min. deferral requirements.

I don’t think that this meets Uniformity. While there is an exception for partial years, it seems to me that this would apply more towards having increases on a specific date (say July 1 for all) or possibly every 6 months. Separating the employees out into two groups like this just doesn’t look right. Am I looking at the rule in the right way?