Coverage/Non-discrim for Semi-Annual Match Allocation

[Guest Monika Zimmer]

I have a calendar year plan that has a match allocation at 6/30 and at 12/31. The conditions are 500 hours and employed on 6/30 and then 500 hours and employed on 12/31. The match formula is the same. I ran coverage at 12/31 including all non-excludables that benefit during the year which includes a participant that receives a match at 6/30 then subsequently terminates in August and does not receive the 12/31 match. How do you account for the two sets of allocation conditions? Do you test under BRF's - current availablity? Or is coverage and ACP testing enough?

[austin3515]

Interesting. Definition of benefitting is "receiving an allocation." (Match participants are deemed to be benefitting if the only reason they didn't get a match is that they didn't defer).

My opinion is that if they satisfied the conditions in EITHER period, they are benefittiing for coverage purposes. So it becomes and ACP issue only.

[ak2ary]

It doesn't matter for regular coverage testing, if you benefit under either date you benefit for the year.

BUT...for matching contributions...

It creates a tiered match which must be tested under Benefits Rights Features...

Interestingly this would not be true of a PS contribution allocated twice a year...in that case if you benefitted under either date, you benefit for the year and the different amounts do not create BeRFs