Safe Harbor 401(K) Plan with Automatic Enrollment

[RayRay]

We've recently taken over as TPA for an older 401(k) plan. It has an enhanced safe harbor match and an automatic contribution arrangement, but it is not designated as an EACA or QACA. Looking at prior administration records, it looks like they've treated it as a Safe Harbor plan for purposes of the ADP/ACP and Top Heavy testing benefits, which I can certainly see the argument for. It also looks like they've met all the criteria to be a QACA without calling it one.  So I'm looking at this and thinking, well, it walks and talks like a duck, so maybe its actually a QACA? And on the other hand, if it isn't a QACA, would it still have the ADP/ACP and Top Heavy testing benefits that the SH Match provide in a normal 401(k) situation?  I feel like the answer to the latter is yes but I can't quite pinpoint why. 

[Lou S.]

It sounds like you have a safe harbor 401(k) plan with an automatic enrollment feature. I'm not seeing a problem. Am I missing something?

[RayRay]

It's entirely possible that I'm just overthinking it.

[BG5150]

QACAs have their own match schedule, deferral escalation rules, vesting requirements.  (Though I think the match is immediately vested as opposed to QACA NEC which can be 2-yr cliff)

[Catch22PGM]

I'm with Lou S. - it sounds like a traditional enhanced safe harbor match with automatic enrollment.  No need to overthink it.  If it was QACA the AA would specifically say that it is QACA.  The only significant difference (based on the information you provided) would be the possible 2-year vesting on the match and auto escalation if the auto enrollment wasn't at least 6% from the start. 

[Bill Presson]

Agreed with Lou. I prefer that combination in fact.