Amendment to Discretionary Match / Notification to Employees

[TPA Bob]

Plan has a discretionary matching contribution.  The Plan Sponsor is wanting to eliminate the matching contribution for the rest of year.

Notification required to participants should include (not limited to just these)

• Date the matching contribution will cease
• How to change future deferral elections with form
• Explanation of how match through March 15th will be determined (payroll v payroll)

Question - the Plan Sponsor is under the impression that they are required to provided a 30 day notice.  While I believe may be in their best interest I do not believe a 30 day notice is required.

Any thoughts would be greatly appreciated.

 

[Bird]

Notification in this case would be a courtesy, not a requirement.  No timeframe for notice.

My radar is up about making sure that the calculation of the match is done in accordance with the plan document - i.e., is it really done on a payroll basis according to the plan, or is it being done that way in practice?  Could make a difference if the plan says match is based on annual pay and annual deferrals. 

[TPA Bob]

We have reviewed the document and cannot find any reference to the time period for which the match is calculated.  Will put into our document (Sungard) and will specify there.

My reference to payroll v payroll is the way the plan sponsor has determined match in operation.