QACA Nonelective Contribution Sample Clauses
A QACA Nonelective Contribution clause outlines the employer's obligation to make a fixed, non-discretionary contribution to employees' retirement accounts under a Qualified Automatic Contribution Arrangement (QACA) in a 401(k) plan. Instead of matching employee deferrals, the employer contributes a set percentage of each eligible employee's compensation, regardless of whether the employee makes their own contributions. This approach ensures all eligible employees receive a retirement benefit, helping the plan meet IRS safe harbor requirements and automatically satisfying certain nondiscrimination testing, thereby simplifying plan administration and promoting equitable retirement savings.
QACA Nonelective Contribution. (a) The Employer may make a QACA Nonelective Contribution to the Account of each Eligible Participant in an amount equal to % (must be at least 3%) of the Eligible Participant’s Plan Compensation for the Plan Year.
(b) The Employer will make a QACA Nonelective Contribution to the Account of each Eligible Participant in an amount equal to % (must be at least 3%) of the Eligible Participant’s Plan Compensation for the Plan Year.