Leaderboard

I don’t know what might be correct or incorrect on the underlying question. But here’s an observation: In situations in which a recordkeeper seeks to impose its rule despite the plan administrator’s readiness, after it considers a lawyer’s or other practitioner’s advice, to deliver a written instruction (one within the service agreement) and even expressly indemnify the recordkeeper for following the instruction, we sometimes remind the recordkeeper that: they say they do not give tax or other legal advice, and they say they lack discretion to administer the plan. In my experience, the recordkeeper’s reluctance to process a proper instruction fades quickly.

No, this isn't an EACA, and the plan document does not allow only the "net" match to be made. I think it's common for a platform vendor to have a deposit tagged to a certain plan year, and it's becoming more frequent that they are using that information to limit transactions under the idea of trying to prevent errors. YMMV on how useful that is. A couple of years ago, I had a sole prop who deposited $10K in deferrals in January for himself for the prior year but he coded it in the current year. When he went to make his full deferral deposit for the current year in the current year, the platform blocked it because it was counting that prior year's receivable and it flagged him as going over the limit. It took way too much effort to get that first deposit changed. But I can see how they are trying to "help". I think we've all had this happen once or twice; luckily that is not the situation here. I think this is a good takeaway - while they give you a miles-long contract, hopefully, it specifies things like this so you can know what to expect.