Fully Vested Match = QMAC?

If a plan has a per-payroll fully vested match subject to deferral withdrawal restrictions, is the match deemed to be a QMAC? 

my understanding is NO.

One of the requirements of a QMAC is it is subject to the same distributions rules as deferrals and therefore can be used in the ADP test, where a 100% vested match is simply like any other match, except it is 100% vested at the start but would not be used in the ADP test, so no deferral distribution type rules apply.

Hi Tom - I indicated that the match is subject to the same withdrawal restriction as deferrals. Does that change your response?

sorry, I missed that with my blinders on.

I am not 100% sure.

The FT William  document has the following language:

Qualified Matching Contributions. In addition to any Qualified Matching Contributions

provided in the Adoption Agreement, the Company in its discretion may make Matching

Contributions designated as Qualified Matching Contributions for the benefit of such

Participants and in such manner determined at the discretion of the Company.

.............

without knowing the language in your document I can't say. I'd lean toward saying 'no' because this language is quite specific "in addition to any QMAC provided" rather than "any match, which by the way happens to have distribution restrictions and is 100% vested". but because that is what you described it almost sounds like it is intended as a QMAC in the first place.

I agree that the answer is most likely no, but depends on the document language.  The definition of QMAC is in 1.401(k)-6.

Quote

Qualified matching contributions (QMACs). Qualified matching contributions or QMACs means matching contributions that, except as provided otherwise in §1.401(k)-1(c) and (d), satisfy the requirements of §1.401(k)-1(c) and (d) as though the contributions were elective contributions, without regard to whether the contributions are actually taken into account under the ADP test under §1.401(k)-2(a)(6) or the ACP test under §1.401(m)-2(a)(6). Thus, the matching contributions must satisfy the nonforfeitability requirements of §1.401(k)-1(c) and be subject to the distribution limitations of §1.401(k)-1(d) when they are allocated to participants' accounts. See also §1.401(k)-2(b)(4)(iii) for a rule providing that a matching contribution does not fail to qualify as a QMAC solely because it is forfeitable under section 411(a)(3)(G) as a result of being a matching contribution with respect to an excess deferral, excess contribution, or excess aggregate contribution, or it is forfeitable under §1.414(w)-1(d)(2).

Notice that the definition says subject to the distribution limitations.   Your plan document will have language in the QNEC/QMAC sections saying that the plan can not allow QNEC/QMAC to be distributed in-service prior to 59 1/2.  The regular match provisions won't have that limitation, unless you have really unusual document language.  So, a match made under the regular match provisions would not be a QMAC, even if 100% vested and not currently available for in-service distribution because it is not subject the same distribution limitations as deferrals.  It would only be a QMAC if it is made under the QMAC provisions.

Now, if it is a SH match, it is a QMAC under 1.401(k)-3(c)(1).

Kevin/Tom - would the below plan language qualify the 100% vested match to be a QMAC?

MATCHING/QUALIFIED MATCHING CONTRIBUTIONS.  The Employer may allocate Matching Contributions either to the Regular Matching Contributions Account or the Qualified Matching Contributions Account (QMAC) of each Participant, payroll by payroll or annually. Administrator elects to treat Matching Contributions as QMACs if they are nonforfeitable when allocated to Participants’ accounts in the Plan and are distributable only in accordance with the distribution provisions (other than for hardships) applicable to Elective Deferrals

that seems to say they may do either

of course the fun starts if the investment house has match subject to vesting acct and a QMAC account, but during the year the match was going into the subject to vesting account and now they desire it to be a QMAC, which is fine based on your document as far as I can tell, but how do you unwind?

Good point Tom. We generally do not have matches that become QMACs mid year, but it can happen. I will clean up the language a little and  I think we would be covered.

I don't see how a regular match allocated each payroll could become a QMAC mid-year.  The definition of QMAC says it must meet certain nonforfeitability requirements and be subject to certain distribution limitations when allocated.   It's either a regular match or a QMAC and that is determined when it is allocated.  

which almost becomes the same issue as forfeitures being used as safe harbors, etc.

the govt initially insisted they had to be designated as 100% when "made", and they only recently switched that to 'when allocated'

so, based on your document, yes you can have QMACs.

now, whether you can, for lack of a better term, wave a magic wand and turn the match into a QMAC at this point is unclear to me. e.g. if we are talking about a 2018 match can one turn that into a QMAC at this point in time. I have no idea.

Just to confirm,  A match that behaves like a QMAC -  has always been 100% vested and has distribution restrictions (like a deferral) -  is by definition a QMAC, even if the document does not say explicitly call it a QMAC.  True or False?

A regular match that is 100% immediately vested and not available for in-service distribution is not a QMAC, even though it "behaves" like a QMAC.  See my posts above.  A QMAC is subject to the distribution limitations that apply to salary deferrals.  A regular match not available for in-service distribution can be amended to make it available for in-service distributions before age 59.5. A QMAC can't because of those distribution limitations.

Also if the document doesn't explicitly say that the match is a QMAC, then the ADP testing provision in the plan document is unlikely to say that the match for NHCEs may be shifted from the ACP to the ADP test subject to restrictions in IRS regulations.  Using the match in the ADP test might comply with the IRS regulations (although Kevin C also has a good point) but might not comply with the plan document.