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Abstract
Several questions on qualified nonelective contributions and qualified matching contributions are answered. A qualified nonelective contribution or QNEC is an employer contribution (other than a matching contribution) that does not give an employee the option to take as cash outside the plan. QNECs must be 100% vested when contributed and are subject to distribution restrictions similar to those that apply to elective deferrals. A qualified matching contribution or QMAC is a matching contribution that an employer has elected to treat the same as an elective contribution. This means that QMACs are subject to 100% vesting and restrictions on early distribution. In addition to being used to pass a failed actual deferral percentage test or actual contribution percentage test, thus enabling highly compensated employees to maximize the amount of their deferral contributions, a QMAC may be used to provide top-heavy minimums for nonkey employees in a top-heavy plan.