DavidO Posted January 28 Posted January 28 I'm new to 401K's and was hoping to get some confirmation or correction on a plan design. I understand that the 3% SH nonelective contribution must be immediately 100% vested. My question is, if the plan also has a QACA does that remove the 100% immediate vesting requirement and change it to a 2 year cliff requirement? Thank you for any guidance.
Bill Presson Posted January 28 Posted January 28 If elected in the AA, the QACA SH (match or nonelective) can have a vesting schedule attached. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
DavidO Posted January 28 Author Posted January 28 Thank you Bill! It would seem that with the new requirement from Secure that new plans have an ACA, many new 401Ks might as well use a QACA to avoid the 100% vesting on the 3% nonelective contribution.
Bill Presson Posted January 28 Posted January 28 Maybe. I think it depends on the eligibility requirement. If you use 21/1 with semi annual entry, most people will have two years of service before entering the plan. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
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