90 day return of deferrals allowed in QACA?

[BG5150]

I know in an EACA, the plan could have a provision that allows the withdrawal of deferrals within 90 of the deferrals starting.

Can that provision be used in a QACA plan?

[duckthing]

Yes, if the arrangement is also an EACA. I'll see if I can dig up a cite for that, but for the moment I know I looked at this before when I had a sponsor who wanted lots of info about all the possible options.

[Pam Shoup]

Check your plan document.  Many providers automatically paired an EACA provision with a QACA one.  Still others kept them separate and you had to affirmaately elect both provisions.

[Doc Ument]

Anyone:  Please tell me why a QACA - any QACA - does not automatically comply with the requirements for being a EACA. Disregard cosmetic issues like the EACA provisions call for a "EACA notice" and the QACA provisions call for a "QACA" notice. Yes, I know that only a EACA can have a refund feature, but tell me why a QACA fails to qualify for having a refund feature. If you cannot, then separate notices would end up saying the same thing, regardless of their name, so why not have one combined notice?  It's true, escalation must start no lower than 3% for a QACA (if there is escalation), but that doesn't violate the EACA rules. Ditto the 10% maximum on escalated deferrals - that doesn't violate the EACA rules. The boilerplate regulatory uniformity requirements look the same to me for both a EACA and a QACA. The character of the automatic contributions as "safe harbor" contributions, and the minimum amount of such contributions for a QACA, all those things do not violate the EACA requirements. A QACA safe harbor notice will comply with the EACA notice rules, unless you can point out to me where I err. (None of this applies if the plan has a "maybe" QACA, which is not a QACA until the midyear amendment amends the plan into a definite QACA. My question deals with a plan that has a QACA on the first and every remining day of the plan year.)

As you might have guessed, I think that the "pairing" of "EACA and QACA" is to make drafters comfortable with having a refund feature, but that such pairing is not technically necessary. But I am open to the possibility that I am overlooking something.

[CJ Allen]

Not a substantive difference, but EACA must comply with QDIA requirement; however, that wouldn't seem to be a big deal-breaker. 

[Doc Ument]

QDIAs have not been required for EACAs some time now.  See, e.g., bottom of page 7 of the following, :

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/automatic-enrollment-401k-plans-for-small-businesses.pdf

Also, don't look at anything published before 2009 - as yes, the internet is cluttered with pages saying that a QDIA is necessary.   I see PPA preapproved plans that have EACAs but not a QDIA requirement.  I don't recall the history, but this explains why I had trouble finding a cite - I guess it was from the QDIA side (DOL jurisdiction) that the link between EACAs and QDIAs once existed.