Eligible Automatic Contribution Arrangements - EACAs

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DEFINITION of 'Eligible Automatic Contribution Arrangements - EACAs'

Also known as EACAs, these were created as part of the Pension Protection Act of 2006 to encourage more worker participation in self-funded defined contribution retirement plans. Like QACAs, all eligible employees must be enrolled in EACA plans and given adequate notice and information about the plan, as well as their contribution and withdrawal rights.

INVESTOPEDIA EXPLAINS 'Eligible Automatic Contribution Arrangements - EACAs'

Unlike QACAs, employers are not required to set aside a minimum deferred contribution per employee nor annually increase the amount set aside. Also, EACAs do not have set employer contribution requirements; employer contribution requirements can be subject to vesting requirements.

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