Safe Harbor Match Formula

[HarleyBabe]

Need some direction. Picked up a takeover plan where the formula for the Safe Harbor Match is 100% up 1% of pay and 50% of elective deferrals for deferrals which exceed 1% but does no exceed 6%. Does that meet the Safe Harbor requirements? Would seem to me it doesn't even meet the Basic.

Also, has something changed or is the person that wrote this doc totally off base as they but a requirement of two years of service to vest in Safe Harbor Match. Mandatory 100% vesting didn't change did it?

Thank you

[four01kman]

1. No

2. No

[RDY2RTR]

This appears to be the SH match formula for a QACA (qualified automatic contribution arrangement). This also allows for a 2 year vesting schedule.

[Kevin C]

Sounds like a QACA to me. Look at 1.401(k)-3(j) and (k).

[HarleyBabe]

Thanks all. I think you are right on the QACA and this would be my first, why does it allow for 2 year vesting and do you all agree the formula is okay. Is a QACA really a good thing when 1, there is rarely turnover and 2, everybody wants to contribute. Seems to me this law firm, who doesn't do administration, set this plan up with no real knowledge.