Excruciating Minutiae

[austin3515]

OK, so the SH Match discontinuance notice is sent out 3/18/09, and there are weekly payrolls. 30 days later is 4/17/09. There is a pay-date on 4/15/09 and 4/22/09. Which pay-date is the final pay-date for the SH Match?

I vote for 4/15/09, because the 30 day period expires on 4/17/09, so it's OK to discontinue the match after tha date (i.e., to have no match on 4/22/09). So to confirm, any pay-dates after the 30 day period need not have any SH Match.

[Kevin C]

What is the effective date of the amendment making the change? The effective date is required to be listed in the notice.

If the effective date is 4/17/09, then the last payroll receiving the SH match is the one paid 4/15/09.

[QDROphile]

I beg to differ. If a participant is earning pay before the effective date and has a deferral election in place, the deferral accrues, and the match along with it. Or there is at least enough of a chance that that is the correct analysis to make you wonder seriously if it is worth it to save the match for that pay period.

[Kevin C]

QDRO,

Wouldn't that depend on how the document defines Compensation? Our documents define Compensation as amounts acutally paid to the employee during the computation period. If the document said Compensation is compensation earned by the employee during the computation period, then I would agree with you.

[A Shot in the Dark]

Austin:

I chalk this up to being perhaps over conservative.

I am going to calculate the final match due as of the the payroll period ending following the 30 day effective date.

So in your example, I would calculate the match through the April 22, 2009 pay period.

[Tom Poje]

hopefully you would use consistent logic. ignoring the safe harbor for the moment.

consider an ee who terminates 12/28/08.

he receives his last paycheck on 1/4/09.

do you include him on your ADP test?

what if he deferred? remember his final paycheck will indicate he had deferrals in 2009 even though he performed no services in 2009.

[austin3515]

Tom, I would include him the ADP test, but I'm having a tough time tying that in to the question...

I'm guessing including your example in the ADP test would lean towards accruing the match through the 4/22/09 payroll?

I had a feeling there wouldn't be a clear-cut consensus on the issue...

I feel comfortable that the a pay-DATE after the notice period ends is out (suggesting the final match pay-period is 4/15/09). For example, couldn't a participant elect to discontinue their 401(k) on 4/21/09? Because they certainly could discontinue their deferrals on 4/21/09 (under most docs anyway), I'm not sure I agree they accrue anything at all DURING the pay-period. I believe it only accrues on pay-day, when they actually have it withheld from pay. Certainly the DOL regs on plan assets would back me up!

PS, the effective date of my amendment would be 4/17/09.