Earnings on those deferrals and most qualified non-elective contributions (QNECs) and qualified matching contributions
(QMACs), were excluded.
In lieu of this complicated formula, employers are permitted to use safe-harbor methods that involve making either (1) qualified matching contributions
or (2) nonelective contributions to all eligible non-highly compensated employees.
In lieu of this complicated formula, employers are permitted to use safe-harbor methods that involve either (1) making qualified matching contributions
or (2) making nonelective contributions to all eligible non-highly compensated employees.
Employer matching contributions--made by the employer in some ratio to employee elective deferrals (if immediately 100 percent vested and subject to certain withdrawal restrictions, they are known as "qualified matching contributions
The plan can either make a qualified non-elective contribution for all eligible non-HCEs (3% or more of compensation, which can also be contributed for the HCEs) or offer qualified matching contributions
(100% matching for the first 3% of elective contributions, and 50% matching on the next 2%, or some alternative matching formula at least as generous).
When the chips are down, plan sponsors can pull out one or both of the Aces-in-the-Hole allowed by law: Qualified Matching Contributions
(QMACs) and Qualified Nonelective Contributions (QNECs).