Traditional Safe Harbor 401(k) Plan vs. QACA — How to Choose
<p><a href="https://www.employeefiduciary.com/blog/safe-harbor-401k-plans-answers-to-common-questions" rel="noopener ugc nofollow" target="_blank">Safe harbor 401(k) plans</a> are the <a href="https://www.employeefiduciary.com/blog/401k-plan-design-study-what-2767-small-business-401k-plans-are-doing" rel="noopener ugc nofollow" target="_blank">most popular type of 401(k)</a> used by small businesses today. Unlike a <a href="https://www.employeefiduciary.com/blog/safe-harbor-or-traditional-401k-plan-how-to-decide" rel="noopener ugc nofollow" target="_blank">traditional 401(k) plan</a>, they automatically pass the <a href="https://www.irs.gov/retirement-plans/401k-plan-fix-it-guide-the-plan-failed-the-401k-adp-and-acp-nondiscrimination-tests" rel="noopener ugc nofollow" target="_blank">ADP/ACP</a> and <a href="https://www.irs.gov/retirement-plans/401k-plan-fix-it-guide-the-plan-was-top-heavy-and-required-minimum-contributions-were-not-made-to-the-plan" rel="noopener ugc nofollow" target="_blank">top heavy</a> nondiscrimination tests when certain contribution and <a href="https://www.employeefiduciary.com/blog/401k-participant-disclosures-what-employers-need-to-know" rel="noopener ugc nofollow" target="_blank">participant disclosure</a> requirements are met. This trade-off is well worth the cost for many business owners, who often bear the brunt of the consequences when their 401(k) plan fails testing.</p>
<p>There are two basic types of safe harbor 401(k) plans available today — traditional and Qualified Automatic Contribution Arrangements (QACAs). Business owners should understand their differences because they can dramatically affect the cost and complexity of their 401(k) plan. In general, QACAs are more complicated to administer due to their automatic enrollment feature, but they can cost less due to more liberal contribution and vesting requirements.</p>
<p><a href="https://medium.com/@ericdroblyen/traditional-safe-harbor-401-k-plan-vs-qaca-how-to-choose-39fc84ac1a90"><strong>Read More</strong></a></p>