Mandatory Match

[Randy Watson]

Plan has a mandatory matching contribution provision and a last day of the plan year requirement to receive a match. Those who retire, are disabled or die prior to the end of the plan year can recieve an allocation (if they deferred). If we move to a discretionary formula during the plan year, we can avoid making allocations because participants have not accrued a right to receive the benefit (they don't accrue a right to receive unless they are employed at the end of the plan year). I assume those who retire, become disabled or die before or after the adoption of the amendment would be entitled to a match. Is that a correct assumption? I assume those who experienced these after the adoption date would not be entitled.

[Jim Chad]

IMNTBHO I think you are close. If anyone has met any of the 3 exceptions, I believe you cannot change until next year.

But I may be confusing this with the way non elective contributions work.

I'm going to be interested to hear what others say.

[austin3515]

Anyone who dies, retires, becomes disabled BEFORE the amendment MUST receive the match in the document, since they have already accrued a right to the benefit.

Everyone else is fair game, since they have not met the allcoation conditions due to the last day rule.

[MWeddell]

I agree with Austin.

[Jim Chad]

If one person has died and gets the current fixed match and the others get a smaller match, this would not really change coverage testing.. Then, you have the ACP test for nondiscrimination.

Is testing this simple or can someone think of something else?

[austin3515]

Ah well I suppose if you make the amendment the day after the owner retires, you would have a problem, since amendments cannot discriminate in favor of HCE's. But that sort of thing is ALWAYS something to watch out for in every decision you make.