Discretionary Match Contribution/Formula

[Guest AdminFL]

If the Plan Document states that matching contribution is discretionary (uniform % as determined by the ER), can the employer decide on a compensation cap each year or must the cap be stated in the plan document? If there is no cap in the docment will Resolutions stating the cap each year suffice?

[Tom Poje]

my understanding, is that if the formula says

the match is discretionary, then that is it, you can not also impose a different cap each year.

On the other hand, it is supposedly possible to put in a corporate resolution capping the match, but it would have to be done before plan year end to avoid cutback rules.

[Guest AdminFL]

Thanks Tom. That's what I thought. My thought was they should do the resolutions at the beginning of the year since they match as they go.