Matching Contributions

[Madison71]

Can anyone provide a specific ruling, etc. that permits matching contributions to be stopped? I know you can do it on a prospective basis, but nothing to back it up. Any help would be appreciated.

[Kevin C]

How about this?

1.411(d)-4, Q-2: To what extent may section 411(d)(6) protected benefits under a plan be reduced or eliminated?

A-2: (a) Reduction or elimination of section 411(d)(6) protected benefits --(1) In general. A plan is not permitted to be amended to eliminate or reduce a section 411(d)(6) protected benefit that has already accrued, except as provided in §1.411(d)-3 or this section. This is generally the case even if such elimination or reduction is contingent upon the employee's consent. However, a plan may be amended to eliminate or reduce section 411(d)(6) protected benefits with respect to benefits not yet accrued as of the later of the amendment's adoption date or effective date without violating section 411(d)(6).

If you are referring to a SH match, there are provisions in the 401(k)/401(m) regs that affect when the amendment can be effective.

[Guest Sieve]

Also, there is nothing in the Code or regs which specifically prohibits an amendment from eliminating a match prospectively, other than the conditions for a SH match. In the absence of such a prohibition, the normal rule applies (as pointed out by Kevin C): prospective changes to benefits not yet accured are allowed.

[Madison71]

Great - thanks.