Can a match exceed 100%?

[Guest jaatirs]

I think this may be a stupid question, but here goes...

I have a client with a plan that matches 100% of the first 3% of deferrals and 50% of the next 3% of deferrals. Forfeitures are to be used as a discretionary matching contribution.

In this situation, would the forfeiture allocation be based on all deferrals or should it be based only on deferrals over 3% since the first 3% has already been matched at 100%?

[g8r]

You can have a match that exceeds 100% of deferrals. However, that doesn't answer your question, which is a plan document issue. In order to satisfy the definitely determinable allocation requirement, you need to be able to determine how to allocate the forfeitures under the terms of the plan. So, I'd look at the plan language again. If it just states that forfeitures are be used to provide a discretionary match, then I'd interpret that to mean the forfeitures are allocated pro-rata based on all deferrals. But, that's just my interpretation...

[Guest gjdavid]

I would agree with the allocation method described above. Also, a match can exceed 100%. I was involved with a plan with a 300% match on deferrals. While it may appear counterintuitive there is nothing in the code that would prevent it.