Feature |
|
QACA |
ACA |
Minimum Automatic Deferral |
None |
3% |
None |
Maximum Automatic Deferral |
None |
At least 6%, Not to Exceed 10% |
None |
Deferral Escalator Requirement |
Not required. However, EACA may use escalator and still satisfy uniform percentage rule |
Yes, (Plan May Start at 6% to Avoid Escalator) |
Not required. However, ACA may use escalator and still satisfy uniform percentage rule |
Employer Contribution, Matching or Nonelective |
Not Required |
Required |
Not Required |
QDIA rules (First Available 12/24/07) |
Optional, but very
likely to be included by Employer
|
Optional, but very likely to be included by Employer |
Optional, but very likely to be included
by Employer |
Default Investment Fiduciary Protection |
No, unless using a
QDIA |
No, unless using a QDIA |
No, unless using a QDIA |
Safe Harbor 401(k) Provisions |
Optional |
Required |
Optional |
Permissible Withdrawal |
Yes,
Within 90 days after first payroll that had an automatic contribution (plan may limit to shorter period provided it is at least 30 days) |
No, unless the QACA is also an EACA |
No, unless the ACA is also an EACA |
ADP/ACP Refund Without Penalty Deadline |
6 months after end of plan if EACA covers all employees.
Plans that do not apply the EACA to all employees are subject to the 2 1/2 month deadline
|
If the safe harbor is abandoned mid-year, 2 1/2 months after end of plan year, unless also satisfying EACA and covering all employees
|
2 1/2 months after
end of plan year,
unless also satisfying EACA and covering all employees |
Plan Year Requirement |
Yes,
Must be for full plan year, even the first year |
Yes,
However, all the 401(k) safe harbor short plan year exceptions apply
|
No |
First available |
01/01/08 |
01/01/08 |
Late 1990s |
To learn more, call 1-973-492-1880 or e-mail info@mhco.com.
© 2010, McKay Hochman Co., Inc. All rights reserved.
