QACA Safe Harbor Match

[Effen]

Can a QACA safe harbor match be applied to deferrals over 6%, assuming the statutory requirements are met? In other words, can I have a QACA safe harbor match that provides 100% on the first 1%, plus 50% on the next 9%?

[Kevin C]

Not if you also want it to be ACP safe harbor.

1.401(m)-3(a)(2)Section 401(m)(12) safe harbor.—

For a plan year beginning on or after January 1, 2008, matching contributions under a plan satisfy the ACP safe harbor provisions of section 401(m)(12) for a plan year if the matching contributions are made with respect to an automatic contribution arrangement described in paragraph §1.401(k)-3(j) that satisfies the safe harbor requirements of §1.401(k)-3, the limitations on matching contributions of paragraph (d) of this section, the notice requirement of paragraph (e) of this section, the plan year requirements of paragraph (f) of this section, and the additional rules of paragraphs (g), (h) and (j) of this section, as applicable.

1.401(m)-3(d)(3)Limit on matching contributions.—

A plan that provides for matching contributions satisfies the requirements of this section only if—

(i) Matching contributions are not made with respect to elective deferrals or employee contributions that exceed 6% of the employee's safe harbor compensation (within the meaning of §1.401(k)-3(b)(2)); and

(ii) Matching contributions that are discretionary do not exceed 4% of the employee's safe harbor compensation.

[Effen]

Thank you. That is exactly what I was looking for.