Employer Match Forefeitable

[Guest koo]

Our plan has an employer match. To share in the employer match, the employee has to be a participant on the last day of the plan year. We want to get rid of the match this year. Can we retroactively amend the Plan document to remove the match since the employee has technically not accrued the match (i.e. it is not the end of the plan year and we do not know who will be employed at the end of the year).

Also, we switched custodains in the middle of the plan year. So technically, if I am able to process an amendment, is it only retroactive to the middle of the plan year (the date custodians changed). Any help would be appreciated.

[PensionPro]

Yes. I don't understand why switching custodians would make a difference though.

http://benefitslink.com/boards/index.php?s...c=43414&hl=

[K2retire]

If it is a safe harbor match you cannot remove it retroactively.

[MWeddell]

The definition of "other right or feature" in Treas. Reg. 1.411(d)-4 makes clear that the allocation conditions for receiving a contribution are only protected benefits that can't be amended retroactively once the allocation conditions are fulfilled. Hence, I agree with the prior posts. Beware that many plans contain exceptions to the "employed on the last day of the plan year" rule for those who die, become disabled, retire, etc., so the amendment couldn't take the match away from those employees.

Lastly, if the match is completely discretionary anyway, you probably don't need a plan amendment at all. The employer may decide to just not fund any matching contribution.