Matching Contributions

[Guest Curious]

[Guest Curious]

How is the matching contribution calculated for an employee whose annual salary is $65,000 and elects to defer 18% of compensation? Employee is paid monthly. Employer matches quarterly. Employer match is 100% of elective contributons to the extent that elective contributions made on behalf of the employee for any plan year do not exceed 6% of compensation.

Also, can anyone tell me what the penalty is if a SAR is late or not distributed?

[This message has been edited by Curious (edited 11-22-98).]

[This message has been edited by Curious (edited 11-22-98).]

[stephen]

The matching contribution would be $975 per quarter for a total of $3,900 for the year. However, if there are forfeitures, profit sharing contributions, or other employer contributions the individual section 415 (25% of compensation) could be reached and you would need to refer to the document as to how to make the correction.

[MWeddell]

To make sure that the match is calculated correctly, you'd need to review the plan document (which is any participant's legal right). For example, the plan document might provide that "compensation" is defined as base pay only for the purpose of computing matching amounts, so that you might receive less than the $3,900 you might have expected.

I don't believe there's a set statutory penalty for late distribution of Summary Annual Reports. I did a quick search of RIA's Pension Coordinator and located an instance where a court imposed a $30 per day penalty, but that'll vary from case to case.