401(k) Suspension of Employer Match Notice for Non-Safe Harbor Plan

[Guest Employee Benefits Gardener]

Please provide your input and cite for if a notice is required for a suspension of employer match? I know that there is the Safe Harbor Plan requirement, but I can't seem to locate information on notification for non-safe harbor plans for suspension of 401(m).

EB Gardener

[K2retire]

Does the document call for a discretionary match or a fixed match?

[Guest Employee Benefits Gardener]

Discretionary match--

Does the document call for a discretionary match or a fixed match?

[12AX7]

The notice is not mandatory to my knowledge (unless perhaps otherwise mandated by the plan document), but I would strongly suggest providing notification to eligible employees so that a change of deferral election can be made to coincide with the suspension of the match. This is good practice for an employer and avoids any confrontation over the issue in the future.

[Guest Employee Benefits Gardener]

The notice is not mandatory to my knowledge (unless perhaps otherwise mandated by the plan document), but I would strongly suggest providing notification to eligible employees so that a change of deferral election can be made to coincide with the suspension of the match. This is good practice for an employer and avoids any confrontation over the issue in the future.

I concur--this was my thought since participants contribution behaviors change when a match is suspended. Thank you, EB Gardener

[Bird]

If you are matching contributions with each payroll, then I agree, it is probably best to provide an informal notice, but definitely not required. It does raise the question of whether the matching contribution defined in the document is truly based on each payroll or should be based on the full year's pay, in which case this "suspension" may call for end of year adjustments.