Jump to content

Recommended Posts

Posted

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. 

Posted

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)

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

Posted

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. 

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

Terms of Use