qualified percentage
(iii)For purposes of this subparagraph, the term “qualified percentage” means, with respect to any employee, any percentage determined under the arrangement if such percentage is applied uniformly, does not exceed 10 percent, and is at least— (I)3 percent during the period ending on the last day of the first plan year which begins after the date on which the first elective contribution described in clause (i) is made with respect to such employee, (II)4 percent during the first plan year following the plan year described in subclause (I), (III)5 percent during the second plan year following the plan year described in subclause (I), and (IV)6 percent during any subsequent plan year. (iv)Clause (i) may be applied without taking into account any employee who— (I)was eligible to participate in the arrangement (or a predecessor arrangement) immediately before the date on which such arrangement becomes a qualified automatic contribution arrangement (determined after application of this clause), and (II)had an election in effect on such date either to participate in the arrangement or to not participate in the arrangement. (D) (i)The requirements of this subparagraph are met if, under the arrangement, the employer— (I)makes matching contributions on behalf of each employee who is not a highly compensated employee in an amount equal to the sum of 100 percent of the elective contributions of the employee to the extent that such contributions do not exceed 1 percent of compensation plus 50 percent of so much of such contributions as exceed 1 percent but do not exceed 6 percent of compensation, or (II)is required, without regard to whether the employee makes an elective contribution or employee contribution, to make a contribution to a defined contribution plan on behalf of each employee who is not a highly compensated employee and who is eligible to participate in the arrangement in an amount equal to at least 3 percent of the employee’s compensation. (ii)The rules of clauses (ii) and (iii) of paragraph (12)(B) shall apply for purposes of clause (i)(I). (iii)An arrangement shall not be treated as meeting the requirements of clause (i) unless, with respect to employer contributions (including matching contributions) taken into account in determining whether the requirements of clause (i) are met— (I)any employee who has completed at least 2 years of service (within the meaning of section 411(a)) has a nonforfeitable right to 100 percent of the employee’s accrued benefit derived from such employer contributions, and (II)the requirements of subparagraph (B) of paragraph (2) are met with respect to all such employer contributions. (iv)The rules of subparagraphs (E)(ii) and (F) of paragraph (12) shall apply for purposes of subclauses (I) and (II) of clause (i). (E) (i)The requirements of this subparagraph are met if, within a reasonable period before each plan year, each employee eligible to participate in the arrangement for such year receives written notice of the employee’s rights and obligations under the arrangement which— (I)is sufficiently accurate and comprehensive to apprise the employee of such rights and obligations, and (II)is written in a manner calculated to be understood by the average employee to whom the arrangement applies. (ii)A notice shall not be treated as meeting the requirements of clause (i) with respect to an employee unless— (I)the notice explains the employee’s right under the arrangement to elect not to have elective contributions made on the employee’s behalf (or to elect to have such contributions made at a different percentage), (II)in the case of an arrangement under which the employee may elect among 2 or more investment options, the notice explains how contributions made under the arrangement will be invested in the absence of any investment election by the employee, and (III)the employee has a reasonable period of time after receipt of the notice described in subclauses (I) and (II) and before the first elective contribution is made to make either such election.