QACAs

[AJ North]

have an existing 401(k) plan with an automatic enrollment feature with no escalator; the plan also provides a safe harbor matching contribution. The plan is now looking change to add a QACA feature for the next plan year and use the 2-year cliff vesting option for the QACA safe harbor match. My question is can the plan sponsor apply the 2-year cliff vesting to existing participants who were receiving a 100% immediate safe harbor matching contribution or would that be a cut back? If it were a cut back, would the plan sponsor have to go through the vesting election process? I would guess no one would elect to be covered under a 2-year cliff if they are currently entitled to a 100% immediate safe harbor match.

[K2retire]

QACA match is a totally new money type, so the vesting can apply to everyone. Of course, many of them will have already met the 2 years of service, but that's a different issue.

[AJ North]

Thank you for your response.