Qaca Clause Samples

A QACA, or Qualified Automatic Contribution Arrangement, is a type of 401(k) plan feature that automatically enrolls eligible employees and sets default contribution rates unless the employee opts out or chooses a different rate. Typically, the plan will also include an employer matching or non-elective contribution and must meet certain vesting and notice requirements to qualify for safe harbor status. The core practical function of a QACA is to increase employee participation in retirement savings plans while providing the employer with relief from certain nondiscrimination testing, thereby ensuring compliance and promoting retirement readiness.