Matching age 50 catch-up contributions - questions

[John A]

1) Does the matching formula on age 50 catch-up contributions have to be the same as the formula on regular deferrals, or can the document define a different match formula for age 50 catch-up than for match on "regular" deferrals?

2) If the match on age 50 catch-up contributions is based on the same formula as the match on the regular deferrals, is the formula applied before or after combining the deferrals? For example, if the formula is 100% of deferrals up to 5% of compensation, and a participant with compensation of $1,000 has $100 in regular deferrals and $100 in age 50 catch-up contributions, is the match on the catch-up contributions zero or $50? Can the plan document define it either way?

3) In a safe-harbor 401(k) plan, are matching contributions on age 50 catch-up contributions subject to the ACP test? If so, how is the ACP test done (include all matching contributions)?

[KIP KRAUS]

I must be confused. I thought the catch up contributions were amounts above the $10,500 so unless a person is already maxing out his current contribution, which would get him the maximum employer match any way. How the match comes into play?

[Tom Poje]

for #3, ACP is on all matching contributions.

KIP - catch ups could occur on other plan imposed limits - e.g. HCEs limited to 5% deferral rate.

also if plan fails ADP test, that is considered a limit, and so anything above that could be considered catch-up. (for the over 50 crowd)

in that case, if match is not allowed on catch ups, you would have to forfeit any match related $ as well.

[Alf]

1) Match on CUs can be different, but it would be subject to (a)(4) testing. If the match on CUs is the same, you don't have to pass (a)(4) on the CU match.

2) You can match CUs or not match CUs. I think that answers your question. If you don't match CUs, you don't combine the deferrals for purposes of the plan limits.

3) You can still be matching contribution safe harbor and no ACP (not nonelective safe harbor) with a match on CUs as long as you do not exceed the matching contribution limitations set forth in the ACP safe harbor rules. If you are a matching contribution safe harbor and have to ACP test for some reason, I think that all of the match is tested in the ACP test, because it means you did not meet the ACP safe harbor test at all (I think, you better check this one).

[John A]

Do others agree with Alf that:

You can still be matching contribution safe harbor and no ACP (not nonelective safe harbor) with a match on CUs as long as you do not exceed the matching contribution limitations set forth in the ACP safe harbor rules.

Or do others think that if you match age 50 catch-up contributions, then you will have to ACP test all matching contributions even if the plan would otherwise satisfy the ACP safe harbor?

[R. Butler]

I agree with Alf. As long as the matching formula satisfies the safe harbor limits I don't see any basis for running an ACP test on matching contributions attributable to cath-ups.