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Showing results for tags 'allocation conditions'.
Found 4 results
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Hi all, We have a client implementing a 6-month accrual rule for their Cash Balance plan and would like to have the same 6 month requirement for their Profit Sharing Plan. Is it even possible to have a 6-month elapsed time rule in place of the normal 1000 hours? Haven't seen anything yet on this issue. -
Client wants to use the following formula for allocating the match to participants. 0-2 Years of Service - 0% match 3 or more Years of Service - 100% match up to 5% deferrals. Eligibility conditions for match are 1 YOS (1000 hours) semi-annual entry dates. I know that eligibility and allocation are not the same thing, but is this allocation formula an allowable one? In essence they are keeping a participant out of the match for an additional 2 years.
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Are there special rules that might apply to a collectively bargained plan for allocation condition purposes? In this takeover plan, the collective bargaining agreement was found to have required that the match be allocated on a monthly basis and that the participant work 120 hours in a month to get the match for that month. This would exceed the annual 1,000 hour DOL rule that typically applies.
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I am sick of sponsors that insist on allocating matching contributions to participant's accounts over the course of the year AND insisting on having allocation conditions (last day, 1000 hours, or both)! I am looking for support for the propostion that allocating a match to participant's accounts before the allocation conditions have been met is a Code, Reg, or IRS or DOL Guidance violation. Any thoughts?
