Dual Elig Match Calculation

[Guest LoloV]

I received a match calcuation and am questioning the method used.

Document states:

3 mo. eligibility for deferrals and a 1 YOS eligibility for match portion.

Compensation from DOP is used.

Match is calculated for plan year (not payroll basis, etc.)

Match is 10% up to 6% of deferrals

My question is , deferrals from what time period should be counted in determing the 10/01/02-12/31/02 match?

If this participant deferred $1000 from 01/01/02-12/31/02, I would typically determine their match using the full deferral amount and comp from 10/01/02-12/31/02.

The match calculation I am looking at uses comp and deferrals from 10/01/02-12/31/02. Is this correct?

I would appreciate any input. I haven't been able to find anything in Sal's book regarding this.

[Guest pjb]

If one is eligible to receive a match for the plan year, all deferrals are matched but limited by the comp limit for the portion of the year the participant is eligible to participate. To determine the comp limit, the date of participation is the date the employee becomes eligible to make deferrals (regardless of match entry date).

[g8r]

I would use all of the deferrals but apply the cap on the match (6%) based on compensation from date of entry into the matching component of the plan. I presume from the person was eligible for the match on 10/1/2002 and would therefore only use comp from 10/1/ - 12/31/02 to determine whether the 6% threshold was exceeded (but I would use deferrals for the entire year).

[Guest LoloV]

I guess my main concern was the match I received only used deferrals from the match entry date. It looks like you both agree this is incorrect.

Thank you for your responses.

[Guest oxdougw]

I've got a similar situation with a twist. 401k eligibility is immediate but match is after 1 YOS with entry on 1/01 or 7/01 following.

If a participant waits a couple of years before deferring and then starts deferrals on 8/01/02, when are those deferrals eligible for match?

Does match start accruing on 8/01 or the following 1/01/03?

[Blinky the 3-eyed Fish]

If the participant was eligibile for the match portion of the plan, but had just not chosen to defer until 8/1/02, then the match begins at that point.

[Guest oxdougw]

Thanks Blinky.

That was my take on it too but am having trouble convincing the employer because that's not the way they want it to work.