Higher match on year end bonuses?

[Guest tracys]

Our client currently has a 401(k) plan with a 50% up to 6% match on the deferrals.

They would like to add the capability of offering year end bonuses that the participant can elect to defer to the plan - no problem. However, they also want to match those bonuses at 100% - over and above the 50% up to 6% already in place. They insist that their major competitor offers this in their plan.

Seems to me that this has the potential of violating both of the "discriminatory match" rules. 1. The match rate cannot accelerate as the deferral percentage increases. 2. No highly compensated participant can receive a higher rate of match when compared to the non-highly (ex. a highly gets the bonus match and now has a total 5% match and a non-highly who took the bonus in cash received only a 3% match).

Is this possible?

[E as in ERISA]

Regulations Section 1.401(a)(4)-4(e)(3)(iii)(G) indicates that each rate of match is a benefit, right or feature. So the rate of match on bonuses must be nondiscriminatory.