matching contribution last day of plan year retroactive decision

[Guest sheTexasHammer]

An employer has a 401(k) plan and a discretionary match on the elective deferrals. If not already stated as an eligibility requirement for receiving the match, can the employer, after the end of the plan year, decide that only those employees who were employed on the last day of the plan year may receive a match? Thanks for any help.

[Kevin C]

No you can't do that. Once someone has earned the right to receive a contribution for the year, you cannot amend to take that right away from them. The allowable timing of the amendment will be determined by what the current plan provisions are. But, amending after the end of the plan year doesn't work at all.

[Guest sheTexasHammer]

No you can't do that. Once someone has earned the right to receive a contribution for the year, you cannot amend to take that right away from them. The allowable timing of the amendment will be determined by what the current plan provisions are. But, amending after the end of the plan year doesn't work at all.

What about the fact that the match is discretionary? Could this be part of the discretion, or is this really an eligibility provision that should have been communicated before-hand?

[Below Ground]

Discretionary applies to amount as a whole. The allocation is not. That is required for basic qualification, know as "definitely determinable benefit". You can choose what you are putting in but not how it is divided. That MUST be stated in the plan document.