Non-Standard Safe Harbor Match

[metsfan026]

Good morning, we just took over a plan with a unique Safe Harbor formula and I just wanted to make sure it was acceptable.

The formula is:

100% of the first 1% deferred + 50% of the next 5% deferred

So, you basically get 3.5% if you defer at least 6% (instead of the typical 4% of comp if you defer at least 5%).  Is this an acceptable formula?  Just not one that I've seen before, so I wanted to double check.

Thanks in advance!

[John Feldt ERPA CPC QPA]

It’s a QACA safe harbor match. I think that’s under 401(m)(12). The plan must have certain minimum automatic enrollment provisions in place to use this provision.

Due to the mandatory automatic enrollment requirements for certain new plans, I see it much more commonly these days than even just five years ago.