Weird Matching Contribution Allocation Formula Issue

[Guest Willy]

Plan has discretionary match. Sevreal years go by during which Employer "wants" to make matching contribution, but is not able to do so. Employer later makes a matching contribution and allocates it based not only on current year deferrals, but on prior year deferrals, as well. (Don't ask me what it was thinking, or if it was thinking. )

Do you think that there is any chance that the IRS would approve a VCP submission requesting approval of a retroactive plan amendment that would allocate discretionary match based on deferrals during the last three plan years? Would such an allocation formula definitely be impermissible? Assume that ACP test is not a problem.

Thanks!

[david rigby]

Employer ... makes a matching contribution and allocates it based not only on current year deferrals, but on prior year deferrals, as well.

Anyone do a 401(m) test?

[Guest Willy]

Employer ... makes a matching contribution and allocates it based not only on current year deferrals, but on prior year deferrals, as well.

Anyone do a 401(m) test?

The fact is that testing has not been done. They would fail the test, but correcting it would not be that difficult becuse there is only one HCE.

[Guest jackig]

Willy - Did you ever get an answer? I have a similar situation where client froze match in 2009 and now wants to "make it up to everyone" by contributing an additional match this year based on last year's deferrals. Plan is a 403(b) plan.