QualGeek

https://www.irs.gov/pub/irs-pdf/p4484.pdf

For the employers who suspended their discretionary matching contributions (calculated on a payroll period basis) in 2020, is the 401(a)(17) compensation limit required to be prorated under Reg. 1.401(a)(17)-1(b)(3)(iii)? The plan year was still a 12-month period, but the matching contributions ceased (for example, let's say as of 4/15/2020). Would that require a compensation limit of 4/12 x $285,000 to be applied to the matching contributions that were made prior to the suspension? If so, it could require forfeiture of a portion of a participant's matching contributions that were made early in the year (likely due to deferrals made from first quarter bonuses). I'm aware that the preamble to the final Regs. regarding the suspension of safe harbor contributions provides the following: "The preamble to the proposed regulations stated that a plan that is amended during the plan year to reduce or suspend safe harbor contributions (whether nonelective contributions or matching contributions) must prorate the otherwise applicable compensation limit under section 401(a)(17) in accordance with the requirements of § 1.401(a)(17)–1(b)(3)(iii)(A). Some commentators asked for clarification as to how these rules apply. Such an explanation of the application of the rules of section 401(a)(17) is beyond the scope of these section 401(k) and (m) regulations." However, because preambles are not law, and because the Regs. are specific to safe harbor plans, I'm looking for thoughts on whether the proration applies in the case of a discretionary matching contribution formula applied to deferrals made for a payroll period, not in excess of a specified percentage of compensation earned during such payroll period. It seems wrong to forfeit a match that was permitted when made, but became in violation of a limit when the employer ceased contributions. Thanks in advance for sharing any thoughts!

Nice summary, thanks for sharing - typo in the first word? "Rehies"

Thank you Larry. The client came through with a copy, but this was very helpful.

Griswold - I keep a repository of preapproved plan documents (you never know when you will need one), and I have one 2002 Citistreet Associates LLC Defined Contribution Plan BPD. No guarantee that it is really what you are looking for, but I have attached it for reference. CitiStreet Associates LLC 2002 Defined Contribution Plan Prototype Basic Plan Document.pdf

I am trying to track down a copy of the Basic Plan Document for the Corporate Benefit Administrators Inc. PPA Non-standardized 401(k) Plan that goes with an opinion letter issued on 3/31/2014 with Letter Serial No: J396139a. Corporate Benefits Administrators Inc. is located in St. Cloud, MN. I keep a repository of basic plan documents for this purpose, but we came up empty looking for this one. Is there anyone out there that might have access to this Basic Plan Document and would be willing to share it?

Is it an older "GUST" preapproved document? I have attempted to attach a list of Legg Mason opinion letters on the GUST preapproved plan list:

Happy to help! I do keep IRS opinion letters in my database, but unfortunately I don't have any for Universal Pensions, Inc. I also don't have an Adoption Agreement for them in my database, so we were just lucky that I came across the Basic Plan Document at some point and saved it.

I have a copy of the Universal Pensions, Inc. Qualified Retirement Plan and Trust Defined Contribution Basic Plan Document 01 with #8000 (8/2001) at the bottom, and it may be what you need. I maintain a database of basic plan documents for exactly this reason, and occasionally it pays off. If I'm doing this correctly, a copy will be attached to this post. I hope it is what you are looking for! Universal Pensions Prototype Basic Plan Document 2001.pdf