Match Formula

[Guest DTromb]

We have a potential new client that would like to have the following match in their plan:

They want to have a tiered match in which there is no match up to 8%. Anything over 8% is matched at 2%.

Is there any non-discrimination issue with having no match up to 8%? Other than having to pass ACP of course.

We've never been asked for such a match. Anyone have any plans with a similar type of match?

Thanks.

[Leopurrd]

Try this thread and the link to the older thread within it:

http://benefitslink.com/boards/index.php?showtopic=33686

Basically you have to ensure you are not discriminating in favor of HCE's, which may be the case in a match contributed only on higher %'s of deferred comp, as in your case.

[Guest DTromb]

Thanks, that was helpful.

[austin3515]

Good luck passing the ACP test!

[Guest DTromb]

ACP is only one of the issues we have with this match formula. We are thinking that whoever proposed this formula may have overlooked the fact that those HCEs with very high salaries may never realize any match, especially if the match is allocated at the end of the year.