Calculating Orphaned Match?!?!?!

[Guest gkaley]

Employer match attributable to excess contributions is forfieted. However, does anyone have any idea as to WHEN the orphaned match amount is calculated? If calculated BEFORE the ACP test (after the ADP test), then the amount would be forfeited regardless if a portion is vested. If calculated AFTER the ACP test, and there is an ACP failure, then the vested portion attributable to the ACP test (excess aggregate contributions) would first be returned to the participant. Obviously, this would be the most favorable hierarchy for participants affected by both ACP refunds and orphaned match.

[Tom Poje]

correct. and the regs say (1.401(m)-1(e)(4)) that when applying the brf test to the rate of match you do not consider returnes of excess aggregate contributions.

so return match first to correct failed ACP test, before worrying about BRF

[Guest gkaley]

Excellent! Thanks!