The QACA 401(k) Plan

A Qualified Automatic Contribution Arrangement (QACA) is an auto-enrollment 401(k) plan with safe harbor provisions that exempt plans from year-end compliance testing requirements. There is a specific combination of safe harbor required contributions and auto-enrollment requirements that make a plan a QACA plan. Unlike other safe harbor designs, a QACA plan is permitted to use a two-year cliff vesting schedule for employer safe harbor contributions.

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