QACA Eligibility Can't Start for 2 Months?

Recordkeeper is requiring a new QACA 401k to add a 2 month eligibility waiting period for new hires so they can distribute notices to them. Is this correct or is it possible to implement a shorter eligibility period such as 30 days? 

Since QACA allows an employee to retroactively opt-out, it seems a lengthy notification period isn't needed, but maybe I'm wrong and the recordkeeper is right. I couldn't find IRS guidance on this.

They're just giving you their operational requirements. There's nothing in the regs requiring that. Pretty sure providing the notice on date of hire for immediate eligibility plans is deemed timely.

I agree with Bill.

On 11/13/2020 at 10:46 AM, Bill Presson said:

They're just giving you their operational requirements. There's nothing in the regs requiring that. Pretty sure providing the notice on date of hire for immediate eligibility plans is deemed timely.

Semi-educated guess:  the Employer is using the vendor to produce and disseminate the SPD and QACA Notices, etc from the payroll files.  So, if the vendor doesn't know about these people right away, ie DOH, then the Notice won't be given timely.

I worked at a place like that, and we 'required' the plans to have at least monthly entry dates (for immediate on hire eligibility) for just that reason.  'Require' is in quotes because we knew we could not mandate that, it's just that we could not record-keep that plan and uphold our end of the 316 services we provided.