Contributions includable in ACP

[Guest jim williams]

In a situation with a 401(k) plan where the employer didn't stop making "matching" contributions on behalf of 2 HCEs after each employee reached the statutory deferral limit of $12k, would these additional contributions be required to included in the ACP test? The matching contributions were made on a per payroll basis and since there were $0 deferral contributions how can there be an associated match?

It seems to me these excess contributions will have to be forfeited.

Any thoughts?

[Guest duh]

You mentioned the match was made per payroll but how is the document written? Is the match determined per payroll or is this match subject to a "true up" at the end of the year? Were the HCE's frontloading? Sometimes, a participant will defer a lot early in the year to get the money invested rather than dollar cost average a level amount throughout the year. I've seen plans where the HCE defers the whole $12k in the first quarter and they send the rest of the match in later because they have to "true up".

[Guest jim williams]

The document provides for the match to be contributed on a per payroll basis. The HCEs were making salary deferral contributions evenly throughout the year until they reached the maximum. They were matched 50%, which would have given them the $6000 match at the time of the last salary deferral contribution. What was actually deposited totaled $9000.