QACA Rules

[Brenda Wren]

I heard at the 2009 ASPPA conference that a QACA (to take advantage of the slightly lower match and longer 2 year vesting schedule) must calculate the match based on all compensation, thus the plan must have true-up language in it if the match is funded each pay period. Reviewing the outline it says, "The QACA requires that you use all compensation while eligible. So this may require a true-up conribution if deferrals do not begin on eligibility date." Listening to the CD, the speaker says that this means that QACA's must have true-up provisions in them.

For those of you that have tackled QACA's, is this what you're doing and is this your understanding of the regs, too?

[Brenda Wren]

Looking at Sal's Book, it appears the ASPPA speaker and her outline were wrong. (Or I interpreted her incorrectly!)

QACA's have the same rules as regular SH plans with regard to using a plan year basis or a payroll period basis to calculate the match. Either method is okay.

My bet goes with Sal!