Francisco Posted February 5, 2019 Share Posted February 5, 2019 Hello! If a client adds a non-SH match effective 7/1 and sets the plan up, at the same time, with per-pay deposit but annual computation (match true-up), what wages/deferrals should be used when calculating the annual match allocation? Would it be the wages/deferrals from after 7/1 when the plan was amended or would it be eligible wages for that year? If possible, I would love a reference showing this in the Code. Thanks! Link to comment Share on other sites More sharing options...
CuseFan Posted February 6, 2019 Share Posted February 6, 2019 Plan itself was in effect for full year, just the match provision was added 7/1, correct? The plan document and it's definition of compensation should provide guidance, this isn't a Code cite issue. If pre-participation compensation is excluded with respect to a plan component (i.e., money type) and the plan clearly states the match is effective 7/1 then you should count compensation from there. Whether client wanted to base on pay from 7/1 or include full year pay should have been discussed in advance and made clear in the document. Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com Link to comment Share on other sites More sharing options...
Patricia Neal Jensen Posted February 6, 2019 Share Posted February 6, 2019 Agree with CuseFan. This question is answered in the plan document. Look in the section which provides the answer to the question of whether or not Compensation is counted for matching from before Participation date or from Participation date. You won't get a Code citation because either choice is acceptable under the law and, probably in the document. Here is the section from one of my plan documents. This shows that all Compensation for the year is counted for matching because the choice which would exclude it is not checked. Compensation Exclusions 16. Pay Before Participation [ ] Compensation earned before participation in the Plan is excluded from Compensation for the following purposes: a. [ ] Elective Deferrals, Voluntary Contributions, Mandatory Contributions, and Safe Harbor Contributions. b. [ ] Matching Contributions c. [ ] Non-Elective Contributions Patricia Neal Jensen, JD Vice President and Nonprofit Practice Leader |Future Plan, an Ascensus Company 21031 Ventura Blvd., 12th Floor Woodland Hills, CA 91364 E patricia.jensen@futureplan.com P 949-325-6727 Link to comment Share on other sites More sharing options...
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