Clarification of timing for initial notice of the QACA arrangement and for the effective date of a default election; and
Clarification that matching or nonelective contributions under a QACA (which must be made to each eligible employee under the plan) may not be withdrawn on account of hardship.
The rate of elective contributions under a cash or deferred election that is in effect on the effective date of the default percentage under the QACA is not reduced; or
Thus, the proposed regulations would apply the same timing rules to the EACA notice that are applied to the QACA notice.
Effective date: The QACA and EACA rules are effective for plan years beginning on or after January 1, 2008.
The AICPA also requested that the final regulations explicitly address whether employer contributions required for a QACA under Sec.
Finally, the AICPA has requested that the notice content requirement for the eligible automatic contribution arrangement (EACA) and QACA notices should be similar to the relief given in Notice 98-52 to the required safe-harbor notices for plan years beginning before January 1, 2000.
