Tiered Match based on service?

[TBob]

Can a 401(k) plan be written with a tiered match formula based on years of service? For example: 50% on the first 5% deferred for the first 5 years of service and the match would increase to 100% on the first 5% deferred after 5 years of service.

The clients current TPA is telling them that they could write this into an individually designed document but could not in their prototype. I would have thought that you could not do this in any document.

Seems to me that the 5 year of service "requirement" to get the second tier of the match would violate the minimum age and service requirements for a qualified plan. What am I missing? Can a match be written this way?

[Guest Harry O]

This is possible. But you need to have the second tiered match pass BRF testing under the 401(a)(4) regulations and you need, as always, to pass the ACP test.