Pro Rata ER Match after Plan Year End

[Guest AJM 34]

A Plan had 2006 Employee Deferrals. No Match was made at the time of deferrals.

Matching contributions are at the sole discretion of the Employer.

The Plan Doc states:

(1) Matching Contribution Formula: For each Plan Year or other contribution period in which a Matching Contribution is made, such Matching Contribution may be made in any specific dollar amount (including zero) and/or any specific percentage (including zero) of Elective Deferrals, as determined by Employer.

The Employer now wants to allocate a $20,000 ER Match to only those employees who deferred during the year on a Pro Rata basis

Is this allowed, since we are past Plan Year End 2006?

What non discrimination testing is requirerd?

Any other issues that I am missing?

Thank you!

[Guest fender5150]

The Employer now wants to allocate a $20,000 ER Match to only those employees who deferred during the year on a Pro Rata basis

Is this allowed, since we are past Plan Year End 2006?

What non discrimination testing is requirerd?

Any other issues that I am missing?

Thank you!

To clarify:

It's Friday, October 12th, 2007 and your client wants to fund a match based on contributions made in 2006, correct? But he wants to show them as contributions made for the 2007 plan year, right?

If I understood the question properly, my instincts would be "no", this wouldn't be allowed, but I'm not confident of that answer. I'm looking forward to hearing if there's anything out there that would allow this.

[Guest AJM 34]

Clarification: They want to show the Employer Contribution for the 2006 Plan Year, not 2007.

[BG5150]

I don't think it's allowable because by now, it's non-deductible.

Or can they just pay an excise tax on the non-deductible amount via 5330?

[Bill Presson]

I don't think it's allowable because by now, it's non-deductible.

Or can they just pay an excise tax on the non-deductible amount via 5330?

It's deductible if it's a sole proprietor or a partnership or some LLC's. I don't think the post said it was a corporation. I also believe (but don't have time to verify) that the contribution could be made within 30 days of the 9/15 deductible deadline for the corporation, shown as 2006 contributions and deducted on the 2007 1120.