Prefunded Match

[wsp]

Eligibility is first of month following 3 months of service. Document also has last day/1000 rule for match. Turns out the employer prefunded the match on a payroll by payroll basis rather than annually as the plan document stated AND they neglected to wait the 3 months for a few participants.

Fortunately this is first year of match so terms can forfeit entire account balance and I can figure the shares that were purchased early and have those amounts liquidated.

But there are a number of individuals who received a match but did not work 1000 hours and client wants them to keep the money. Is that an amendment (eliminate the 1000 hour rule) that we can do retroactively? Match amount is not discretionary so it won't change/reduce anyone elses benefit.

[401_4_ever]

I'd like to hear what everyone else thinks, but I'm thinking the only way is to do a retroamend via the VCP program. If the document allows it, you might be able to forfeit the money and then allocate it as a QNEC or QMAC.