Discretionary Match

[Guest KAGrist]

I have a calendar year plan that allows for a discretionary match to be made based on payroll period, with no accrual rules (no last day requirement, no hours requirement).

The Plan has not made a match in the past, but is interested in providing a match going forward.

1) Can the plan start the match in the middle of the plan year, i.e. first payroll beginning in August 2003?

2) Would they need to consider giving matching contributions retroactive back to January 2003?

3) If not retroactive, would eligible compensation for the ACP test have to be August through December?

Are there any other issues I should be considering?

Thanks for your help.

Kurt