Safe Harbor Match

[Guest jefe96]

Giving an enhanced match (100% up to 4%) to satisfy ADP/ACP safe harbor. It is in done by payroll method written in document. Looking over what has been put in, it looks like a few people have received slightly more than 4%, roughly 4.2%. The regs regarding payroll period method match deposits only talk of not having to 'true up' the match contribution at year end due to changes in deferral elections, etc. I can't find anything about having to 'true down' the match contribuiton. I don't really see anything wrong with leaving this money in the plan allocated to these participants, does anyone else? I mean, if by virtue of electing to use the payroll period method you can get away with not giving someone the full match amount, why would there be a problem with allocating an extra $50, which is what it turns out to be for most of the affected people.

[Blinky the 3-eyed Fish]

Matching per payroll period will always provide the same or lesser amounts than matching annually. The fact that someone got more is not a product of the method, but rather a clear mathematical error. That is why you won't find any such talk of a true down. You ask what's the problem, and of course it's an issue of failing to follow the document. You may justify the overage as immaterial and not correct it, but an auditor may feel differently. It helps a bit if those receiving the excess are NHCE's.