QACA Amendment

I do not think there is clear guidance for amending a QACA. Sponsor set up QACA in 2014 with initial rate at 3% and escalator of 1% after the end of the uniform period. Now sponsor wants to amend the plan 1/1/19 to set a 6% deferral rate to only the new hires on or after 1/1/19. I do not think this will result in a uniform QACA or it sets up 2 QACA designs in one plan. I think it blows the safeharbor.

Any comments?

without other guidance, I'd lean toward saying it is probably ok.

 obviously if the plan wasn't a QACA to begin with I could set it up and only those without an election in place would start at 6%, everyone stays where they are at.

I'm not sure this is any different. certainly those less than 3% have already indicated what they want, so they wouldn't change. and it is only those who are between 3 and 6% that would be, as you say a 'second' QACA. but if someone is at 3% they could have switched and deferred more if they wanted to originally. Anyone who was there before 2017 would be at 6% now (assuming 1% increase each year) someone hired in 2017 would have been 3% in 2017, then 4% in 2018 and now 5% in 2019 (instead of 6%) so really the only people hired in 2017 and 2018 would be 'different', and they could have increased their deferral % to 6% if they wanted to anyway.

I agree but I remember Bob Kaplan last year at ASPPA annual stating there is no guidance on amending a QACA. I am concerned about the different levels of deferral % - new hires in 2019 at 6% tier but 2017 and 2018 new hires at lower tier without a reason liike hardship, 415 limit, rehires after a year can start over.. But I would like to make it work!

without guidance I think you do a god faith effort / interpretation of how to do things.

perhaps some point to consider - how many people involved in 2017 and 2018, and how many left it at 3% or switched? I find it hard to believe there are are a lot involved, but then I have no idea what size of group you are talking about.

3 minutes ago, Tom Poje said:

without guidance I think you do a god faith effort / interpretation of how to do things.

Wow, you really do know people in high places...

48 minutes ago, Tom Poje said:

without guidance I think you do a god faith effort / interpretation of how to do things.

Can I get an Amen?

this is funny at least!

On 3/8/2018 at 11:53 AM, XTitan said:

Can I get an Amen?

AMEN!!!!