This site may contain affiliate links. We may earn a commission if you sign up through our links. Content is for educational purposes only and is not financial, investment, tax, or legal advice. Consult a qualified professional before making financial decisions.

Back to Glossary

QACA (Qualified Automatic Contribution Arrangement)

Plan Features

A Safe Harbor 401(k) plan design that combines automatic enrollment with a specific employer contribution formula to automatically satisfy nondiscrimination testing requirements. QACAs must auto-enroll employees at a minimum 3% default rate (increasing 1% annually up to at least 6%) and provide either a matching contribution or 3% nonelective contribution with accelerated vesting.

Related Terms