Payroll Based Match

[Guest jusducki]

Plan has payroll based match - do I strictly use amount employer submitted for 2006 Plan Year using Employer report and pay no attention to what investment firm received during calendar year?

[Jim Chad]

2 questions:

1. When you say plan has payroll based match, are you saying that the document says to calculate match on a per pay basis?

2. Use for what purpose? Testing? 5500? Employer tax return? Other?

[Guest jusducki]

1 - doc says Match is made on a payroll basis so no annual true-up required

2 - employer Match report - my thought is that it would be used for everything (testing, 5500) as the investment firm report is done on a cash basis so includes final '05 match contribution but not final '06 match contribution plus many participants have commission income so their deferral percentage, thus the Match, changes throughout the Plan Year so, theoretically, the Employer Match report is far more accurate than the Match calculated by me as my number is based on annual comp.

Thanks in advance for your assistance

2 questions:

1. When you say plan has payroll based match, are you saying that the document says to calculate match on a per pay basis?

2. Use for what purpose? Testing? 5500? Employer tax return? Other?

[Guest BXO]

What you do is dependent on what you are responsible for.

Are you responsible for making sure the calculated and deposited match conforms to the formula in the plan document? If you are preparing the ACP test, do you take the payroll numbers or is part of your job to review and change the payroll numbers?

For the 5500, you might consider using cash basis and being done with it.

[Jim Chad]

I agree with BXO that the easiest way to do the 5500 is on a cash basis.

But his other questions are very important. If you have to do the ADP and ACP test, you will need to use the payroll reports so that you are only using contributions in the correct year.

Is it part of your "job" to double check the match calculation to make sure it is correct?