Qualified Automatic Contribution Arrangement (QACA. Effective for Plan Years beginning after December 31, 2007, and if elected in the Adoption Agreement, the Employer will maintain a Qualified Automatic Contribution Arrangement for the purpose of satisfying the nondiscrimination requirements for Elective Deferrals and Matching Contributions under Code Sections 401(k) and 401(m). For purposes of the nondiscrimination requirements, a Qualified Automatic Contribution Arrangement is defined as any cash or deferred arrangement that satisfies certain requirements with respect to automatic deferrals, Matching or Non-Elective Contributions and timely notice to Employees. (1) The automatic deferral requirements are met if, under the arrangement, Employees are treated as having elected to have the Employer make Elective Deferrals equal to a qualified percentage of Compensation as elected on the Adoption Agreement which meets the safe harbor definition under Regulations Section 1.401(k)-3(b)(2). The qualified percentage cannot be more than 10% and must be equal to at least 3% of Compensation for the first Plan Year the deemed election applies to the Participant; 4% for the Plan Year beginning after the Plan Year containing the first anniversary of the Employee’s participation in the Plan; 5% during the Plan Year beginning after the Plan Year containing the second anniversary of the Employee’s participation in the Plan; and 6% for the Plan Year beginning after the Plan Year containing the third anniversary of the Employee’s participation in the Plan and all subsequent Plan Years. The qualified percentage must be applied uniformly to all eligible Employees. The Employer may elect to increase the minimum contribution midyear if (i) the percentage is uniform based on the number of Plan Years or portion of Plan Years since an Employee first had a default contribution made on his or her behalf and (ii) the minimum percentage requirement is satisfied for the entire Plan Year. (2) An Employee may affirmatively elect not to have such Elective Deferrals made on his or her behalf or to make the Elective Deferrals at a different level. Such election shall remain in effect until revoked or amended by the Participant. Employees eligible to participate in the automatic contribution arrangement (or a predecessor arrangement) immediately before the date on which the arrangement became a Qualified Automatic Contribution Arrangement and who had an election in effect to either participate at a certain percentage or not to participate, are not included in the meaning of eligible Employees for purposes of applying the automatic deferral provision. An election not to defer [i.e., the Employee has elected to contribute zero percent (0%)] is considered an affirmative election. Current Employees who have not made an election as to participate are treated as not having made an affirmative election. (3) The QACA Safe Harbor Employer Contribution is a Matching Contribution made to satisfy the nondiscrimination rules, equal to the sum of 100% of the Elective Deferrals of the Employee to the extent that such contributions do not exceed 1% of Compensation plus 50% of such Elective Deferrals that exceed 1% of Compensation. For purposes of this provision, the following requirements must also be satisfied:
Appears in 1 contract
Samples: Defined Contribution Plan
Qualified Automatic Contribution Arrangement (QACA. Effective for Plan Years beginning after December 31, 2007, and if If elected in the Adoption Agreement, then effective beginning with the Plan Year indicated therein, the Employer will maintain a Qualified Automatic Contribution Arrangement for the purpose of satisfying the nondiscrimination requirements for Elective Deferrals and Matching Contributions under Code Sections 401(k) and 401(m). For purposes of the Code’s nondiscrimination requirements, a Qualified Automatic Contribution Arrangement is defined as any cash or deferred arrangement that satisfies certain Code requirements with respect to automatic deferrals, Matching or Non-Elective Contributions and timely notice to Employees.
(1) The automatic deferral requirements are met if, under the arrangement, Employees are treated as having elected to have the Employer make Elective Deferrals equal to a qualified percentage of Compensation as elected on the Adoption Agreement which meets the safe harbor definition under Regulations Section 1.401(k)-3(b)(2)Compensation. The qualified percentage cannot be more than 10% and must be equal to at least least: 3% of Compensation during the period ending on the last day of the first Plan Year which begins after the date on which the first Elective Deferral described in Article VI(D)(1) of the Adoption Agreement is made with respect to such Employee; 4% for the first Plan Year the deemed election applies to the Participant; 4% for the Plan Year beginning after following the Plan Year containing the first anniversary of the Employee’s participation in the Plan; 5% during the second following Plan Year beginning after the Plan Year containing the second anniversary of the Employee’s participation in the PlanYear; and 6% for the third following Plan Year beginning after the Plan Year containing the third anniversary of the Employee’s participation in the Plan and all subsequent Plan Years. The qualified percentage must be applied uniformly to all eligible Employees. The Employer may elect to increase the minimum contribution midyear if (i) the percentage is uniform based on the number of Plan Years or portion of Plan Years since Employees who have not made an Employee first had a default contribution made on his or her behalf and (ii) the minimum percentage requirement is satisfied for the entire Plan Yearaffirmative election.
(2) An Employee may affirmatively elect not to have such Elective Deferrals made on his or her behalf or to make the Elective Deferrals at a different level. Such election shall remain in effect until revoked or amended by the Participant. .
(3) Employees eligible to participate in the automatic contribution arrangement (or a predecessor arrangement) immediately before the date on which the arrangement became a Qualified Automatic Contribution Arrangement and who had an election in effect to either participate at a certain percentage or not to participate, are not included in the meaning of eligible Employees for purposes of applying the automatic deferral provision. An election not to defer [(i.e., the Employee has elected to contribute zero percent (0%)] % on the Salary Deferral Agreement) is considered an affirmative election. Current Employees who have not made an election as to participate completed a Salary Deferral Agreement are treated as not having made an affirmative election.
(34) The QACA Safe Harbor Employer Contribution is a Matching Contribution made to satisfy the nondiscrimination rules, equal to the sum of 100% of the Elective Deferrals of the Employee to the extent that such contributions do not exceed 1% of Compensation plus 50% of such Elective Deferrals Compensation that exceeds 1% but does not exceed 16% of Compensation. For purposes of this provision, the following requirements must also be satisfied:
(i) The rate of Matching Contribution does not increase as the rate of an Employee’s Elective Deferrals increases; and
(ii) The rate of Matching Contribution with respect to any rate of Elective Deferral by a Highly Compensated Employee is no greater than the rate of Matching Contribution with respect to the same rate of Elective Deferral by a Non-Highly Compensated Employee. Alternatively, the Safe Harbor Employer Contribution requirement of Code Section 401(k)(13)(D)(i)(II) is met if the Employer makes a QACA Non-Elective Contribution to the Plan of at least 3% of an Employee’s Compensation on behalf of each Non-Highly Compensated Employee who is eligible to participate in the Plan.
(5) Any Employee who has completed at least two (2) Years of Service must have a nonforfeitable right to 100% of the Employee’s accrued benefit from Employer contributions. In addition, Matching or other Non-Elective Contributions under a QACA are subject to the withdrawal rules applicable to Elective Deferrals under Code Section 401(k)(2)(B) (except that the Hardship rule is not available).
(6) The Employer must provide Employees with a notice (as explained in paragraph 4.11(c) below) describing the QACA provisions and the ability to opt out of the Plan or to modify the automatic contribution amount.
Appears in 1 contract
Samples: Savings and Investment Plan Document (Sterling Chemicals Inc)
Qualified Automatic Contribution Arrangement (QACA. Effective for Plan Years beginning after December 31, 2007, and if elected in the Adoption AgreementIf Item O(2) is selected, the Employer will maintain Plan provides for an automatic election to have Pre-tax Elective Deferral Contributions made under a Qualified Automatic Contribution Arrangement for the purpose of satisfying the nondiscrimination requirements for Elective Deferrals and Matching Contributions under Code Sections 401(kArrangement. (See Item O(2) and 401(m)Section 3.11.) Employer Contributions are allocated according to the provisions of Section 3.06. For purposes If Item U(5)(a)(iv) is selected, the Employer may make all or any portion of the nondiscrimination requirements, a Qualified Automatic Contribution Arrangement is defined as any cash or deferred arrangement that satisfies certain requirements with respect to automatic deferrals, Matching or Non-Employer Contributions (excluding Elective Deferral Contributions and timely notice Wage Rate Contributions) which are to Employees.
(1) The automatic deferral requirements are met ifbe invested in Qualifying Employer Securities, under to the arrangement, Employees are treated as having elected to have Trustee in the form of Qualifying Employer make Elective Deferrals equal to a qualified percentage of Compensation as elected on the Adoption Agreement which meets the safe harbor definition under Regulations Section 1.401(k)-3(b)(2)Securities. The qualified percentage cannot be more than 10% and must be equal to at least 3% Employer may make all or a part of an annual Employer Contribution (Contributions that are calculated based on Annual Compensation or Compensation for the first Plan Year) before the end of the Plan Year. If the annual Contribution is made for or allocated to each person who was an Active Participant at any time during the Plan Year, such Contributions made before the end of the Plan Year may be allocated when made in a manner that approximates the deemed election applies allocation that would otherwise have been made for the Plan Year. Succeeding allocations shall take into account amounts previously allocated for the Plan Year. The percentage of the Employer Contribution allocated to the Participant; 4% Participant for the Plan Year beginning after shall be the same percentage that would have been allocated to him if the entire allocation had been made for the Plan Year. Excess allocations shall be forfeited and reallocated as necessary to provide the percentage applicable to each Participant. Any other annual 29 Contributions made before the end of the Plan Year containing shall be held unallocated until the first anniversary advance Contributions (and earnings) are allocated according to the provisions of Section 3.06. A portion of the Employee’s participation Plan assets resulting from Employer Contributions (but not more than the original amount of those Contributions) may be returned if the Employer Contributions are made because of a mistake of fact or are more than the amount deductible under Code Section 404 (excluding any amount which is not deductible because the Plan is disqualified). The amount involved must be returned to the Employer within one year after the date the Employer Contributions are made by mistake of fact or the date the deduction is disallowed, whichever applies. Except as provided under this paragraph and in Articles VIII and X, the assets of the Plan, including the corpus or income of the Trust, shall never be diverted to or used for the benefit of the Employer and are held for the exclusive purpose of providing benefits to Participants and their Beneficiaries and for defraying reasonable expenses of administering the Plan. Prior Plan Assets which result from contributions made by the Employer shall be treated in the same manner as Employer Contributions made under this Plan; 5% during . If the Prior Plan Year beginning after the Plan Year containing the second anniversary of the Employee’s participation Assets are transferred from a terminated plan, they shall be treated in the Plan; and 6% for the same manner as Employer Contributions made under this Plan Year beginning after the Plan Year containing the third anniversary of the Employee’s participation in the Plan and all subsequent Plan Years. The qualified percentage must be applied uniformly to all eligible Employees. The Employer may elect to increase the minimum contribution midyear if (i) the percentage is uniform based on the number of Plan Years or portion of Plan Years since an Employee first had before a default contribution made on his or her behalf and (ii) the minimum percentage requirement is satisfied for the entire Plan YearForfeiture Date.
(2) An Employee may affirmatively elect not to have such Elective Deferrals made on his or her behalf or to make the Elective Deferrals at a different level. Such election shall remain in effect until revoked or amended by the Participant. Employees eligible to participate in the automatic contribution arrangement (or a predecessor arrangement) immediately before the date on which the arrangement became a Qualified Automatic Contribution Arrangement and who had an election in effect to either participate at a certain percentage or not to participate, are not included in the meaning of eligible Employees for purposes of applying the automatic deferral provision. An election not to defer [i.e., the Employee has elected to contribute zero percent (0%)] is considered an affirmative election. Current Employees who have not made an election as to participate are treated as not having made an affirmative election.
(3) The QACA Safe Harbor Employer Contribution is a Matching Contribution made to satisfy the nondiscrimination rules, equal to the sum of 100% of the Elective Deferrals of the Employee to the extent that such contributions do not exceed 1% of Compensation plus 50% of such Elective Deferrals that exceed 1% of Compensation. For purposes of this provision, the following requirements must also be satisfied:
Appears in 1 contract
Qualified Automatic Contribution Arrangement (QACA. Effective for Plan Years beginning after December 31, 2007, and if elected in the Adoption Agreement, the Employer will maintain a Qualified Automatic Contribution Arrangement for the purpose of satisfying the nondiscrimination requirements for Elective Deferrals and Matching Contributions under Code Sections 401(k) and 401(m). For purposes of the nondiscrimination requirements, a Qualified Automatic Contribution Arrangement is defined as any cash or deferred arrangement that satisfies certain requirements with respect to automatic deferrals, Matching or Non-Elective Contributions and timely notice to Employees.
(1) The automatic deferral requirements are met if, under the arrangement, Employees are treated as having elected to have the Employer make Elective Deferrals equal to a qualified percentage of Compensation. Compensation as elected on the Adoption Agreement which for this purpose means Compensation that meets the safe harbor definition under Regulations Regulation Section 1.401(k)-3(b)(2). The qualified percentage cannot be more than 10% and must be equal to at least 3% of Compensation for the first Plan Year the deemed election applies to the Participant; 4% for the Plan Year beginning after the Plan Year containing the first anniversary of the Employee’s participation in the Plan; 5% during the Plan Year beginning after the Plan Year containing the second anniversary of the Employee’s participation in the Plan; and 6% for the Plan Year beginning after the Plan Year containing the third anniversary of the Employee’s participation in the Plan and all subsequent Plan Years. The qualified percentage must be applied uniformly to all eligible Employees. The Employer may elect to increase the minimum contribution midyear if if: (i) the percentage is uniform based on the number of Plan Years or portion of Plan Years since an Employee first had a default contribution made on his or her behalf and (ii) the minimum percentage requirement is satisfied for the entire Plan Year.
(2) An Employee may affirmatively elect not to have such Elective Deferrals made on his or her behalf or to make the Elective Deferrals at a different level. Such election shall remain in effect until revoked or amended by the Participant. Employees eligible to participate in the automatic contribution arrangement (or a predecessor arrangement) immediately before the date on which the arrangement became a Qualified Automatic Contribution Arrangement and who had an election in effect to either participate at a certain percentage or not to participate, are not included in the meaning of eligible Employees for purposes of applying the automatic deferral provision. An election not to defer [(i.e., the Employee has elected to contribute zero percent (0%)] % on the Salary Savings Agreement) is considered an affirmative election. Current Employees who have not made an election as to participate completed a Salary Savings Agreement are treated as not having made an affirmative election.
(3) The QACA Safe Harbor Employer Contribution is a Matching Contribution made to satisfy the nondiscrimination rules, equal to the sum of 100% of the Elective Deferrals of the Employee to the extent that such contributions do not exceed 1% of Compensation plus 50% of such Elective Deferrals that exceed 1% of Compensation. For purposes of this provision, the following requirements must also be satisfied:
(i) Matching Contributions are not provided with respect to Elective Deferrals in excess of 6% of Compensation;
(ii) the rate of Matching Contribution does not increase as the rate of an Employee’s Elective Deferrals increases; and
(iii) the rate of Matching Contribution with respect to any rate of Elective Deferral by a Highly Compensated Employee is no greater than the rate of Matching Contribution with respect to the same rate of Elective Deferral by a Non-Highly Compensated Employee. Alternatively, the Matching Contribution requirements are met if the Employer makes a QACA Non-Elective Contribution to the Plan of at least 3% of an Employee’s Compensation on behalf of each Employee who is eligible to participate in the Plan. A QACA Non-Elective Contribution cannot be taken into account when computing permitted disparity under Code Section 401(l).
(4) In determining whether a Qualified Automatic Contribution Arrangement satisfies the nondiscrimination requirements with respect to Employer Contributions, including Matching Contributions, any Employee who has completed at least two (2) Years of Service must have a nonforfeitable right to 100% of the Employee’s accrued benefit from the Employer contributions. In addition, QACA Safe Harbor Matching or Non-Elective Contributions are subject to the withdrawal rules applicable to Elective Deferrals and cannot be withdrawn prior to age 59½ or be used for Hardship withdrawal purposes. A Defined Contribution Plan is treated as meeting the requirements of Code Section 401(m)(2) with respect to Matching Contributions if the Plan is a Qualified Automatic Contribution Arrangement as defined herein and in Code Section 401(k)(13) and meets the limitation on Matching Contributions requirements of Code Section 401(k)(11)(B).
(5) If an Employee is rehired following a termination of employment lasting longer than an entire Plan Year, the Plan Administrator may enroll the Employee at the applicable minimum contribution percentage applicable to an Employee’s initial participation under the Plan, regardless of the percentage applicable to the rehired Employee at the time of his or her termination. If a terminated Employee is reemployed before a full Plan Year has passed, QACA contributions shall resume at the minimum contribution percentage applicable to the Employee based on the number of Plan Years or portions of Plan Years since the date the Employee first had default contributions made under the QACA.
Appears in 1 contract
Samples: Defined Contribution Plan (1st Constitution Bancorp)
Qualified Automatic Contribution Arrangement (QACA. Effective for Plan Years beginning after December 31, 2007, and if elected in the Adoption Agreement, the Employer will maintain a Qualified Automatic Contribution Arrangement for the purpose of satisfying the nondiscrimination requirements for Elective Deferrals and Matching Contributions under Code Sections 401(k) and 401(m). For purposes of the nondiscrimination requirements, a Qualified Automatic Contribution Arrangement is defined as any cash or deferred arrangement that satisfies certain requirements with respect to automatic deferrals, Matching or Non-Elective Contributions and timely notice to Employees.
(1) The automatic deferral requirements are met if, under the arrangement, Employees are treated as having elected to have the Employer make Elective Deferrals equal to a qualified percentage of Compensation as elected on the Adoption Agreement which meets the safe harbor definition under Regulations Section 1.401(k)-3(b)(2). The qualified percentage cannot be more than 10% and must be equal to at least 3% of Compensation for the first Plan Year the deemed election applies to the Participant; 4% for the Plan Year beginning after the Plan Year containing the first anniversary of the Employee’s participation in the Plan; 5% during the Plan Year beginning after the Plan Year containing the second anniversary of the Employee’s participation in the Plan; and 6% for the Plan Year beginning after the Plan Year containing the third anniversary of the Employee’s participation in the Plan and all subsequent Plan Years. The qualified percentage must be applied uniformly to all eligible Employees. The Employer may elect to increase the minimum contribution midyear if (i) the percentage is uniform based on the number of Plan Years or portion of Plan Years since an Employee first had a default contribution made on his or her behalf and (ii) the minimum percentage requirement is satisfied for the entire Plan Year.
(2) An Employee may affirmatively elect not to have such Elective Deferrals made on his or her behalf or to make the Elective Deferrals at a different level. Such election shall remain in effect until revoked or amended by the Participant. Employees eligible to participate in the automatic contribution arrangement (or a predecessor arrangement) immediately before the date on which the arrangement became a Qualified Automatic Contribution Arrangement and who had an election in effect to either participate at a certain percentage or not to participate, are not included in the meaning of eligible Employees for purposes of applying the automatic deferral provision. An election not to defer [i.e., the Employee has elected to contribute zero percent (0%)] is considered an affirmative election. Current Employees who have not made an election as to participate are treated as not having made an affirmative election.
(3) The QACA Safe Harbor Employer Contribution is a Matching Contribution made to satisfy the nondiscrimination rules, equal to the sum of 100% of the Elective Deferrals of the Employee to the extent that such contributions do not exceed 1% of Compensation plus 50% of such Elective Deferrals that exceed 1% of Compensation. For purposes of this provision, the following requirements must also be satisfied:
(i) Matching Contributions are not provided with respect to Elective Deferrals in excess of 6% of Compensation;
(ii) the rate of Matching Contribution does not increase as the rate of an Employee’s Elective Deferrals increases; and
(iii) the rate of Matching Contribution with respect to any rate of Elective Deferral by a Highly Compensated Employee is no greater than the rate of Matching Contribution with respect to the same rate of Elective Deferral by a Non-Highly Compensated Employee. Alternatively, the Matching Contribution requirements are met if the Employer makes a QACA Non- Elective Contribution to the Plan of at least 3% of an Employee’s Compensation on behalf of each Employee who is eligible to participate in the Plan. A QACA Non-Elective Contribution cannot be taken into account when computing permitted disparity under Code Section 401(l).
(4) In determining whether a Qualified Automatic Contribution Arrangement satisfies the nondiscrimination requirements with respect to Employer Contributions, including Matching Contributions, any Employee who has completed at least two (2) Years of Service must have a nonforfeitable right to 100% of the Employee’s accrued benefit from the Employer contributions. In addition, QACA Safe Harbor Matching or Non- Elective Contributions are subject to the withdrawal rules applicable to Elective Deferrals and cannot be withdrawn prior to age 59½ or be used for Hardship withdrawal purposes. A Defined Contribution Plan is treated as meeting the requirements of Code Section 401(m)(2) with respect to Matching Contributions if the Plan is a Qualified Automatic Contribution Arrangement as defined herein and in Code Section 401(k)(13) and meets the limitation on Matching Contributions requirements of Code Section 401(k)(11)(B).
(5) If an Employee is rehired following a termination of employment lasting longer than an entire Plan Year, the Plan Administrator may enroll the Employee at the applicable minimum contribution percentage applicable to an Employee’s initial participation under the Plan, regardless of the percentage applicable to the rehired Employee at the time of his or her termination. If a terminated Employee is reemployed before a full Plan Year has passed, QACA contributions shall resume at the minimum contribution percentage applicable to the Employee based on the number of Plan Years or portions of Plan Years since the date the Employee first had default contributions made under the QACA.
Appears in 1 contract
Samples: Defined Contribution Plan
