Safe Harbor Plan and ACA

We have a Safe Harbor Plan that would like to add Automatic Contribution Arrangement (ACA) mid-year for 2024.

I have 2 questions.

1) Can a Safe Harbor Plan add an ACA feature? To me, it seems like a Safe Harbor plan can only be a QACA, so ACA feature cannot be added. Is that correct?

2) If the ACA feature can be added to a Safe Harbor Plan, can the feature be added Mid-Year (I realize that a Safe Harbor plan cannot be changed to QACA mid-year)?

Thanks.

On 7/15/2024 at 12:49 PM, Vlad401k said:

1) Can a Safe Harbor Plan add an ACA feature? To me, it seems like a Safe Harbor plan can only be a QACA, so ACA feature cannot be added. Is that correct?

Of course check what your specific plan document allows, but in general a non-QACA safe harbor can have non-QACA ACA provisions.

On 7/15/2024 at 12:49 PM, Vlad401k said:

2) If the ACA feature can be added to a Safe Harbor Plan, can the feature be added Mid-Year (I realize that a Safe Harbor plan cannot be changed to QACA mid-year)?

As long as you are not changing the safe harbor contribution, or reducing the number of participants eligible to receive safe harbor contributions, you should be able to add ACA provisions mid-year.  Keep in mind that unless the ACA will only apply to new entrants to the plan after the plan is amendded, the mid year ACA cannot be an EACA.  If not an EACA there can be no 90 day withdrawals in 2024.