401(k) Match Options

[oriecat]

Due to some serious financial issues, we are looking into eliminating our 401(k) match. (Current match is 50% of the first 3%, on a per payroll basis.) We know we will have to do a plan amendment and new SPD to everyone. I am hoping this will be temporary and I am wondering if there is any way we could amend the plan so that it will be easier to turn the match back on without having to amend the plan again. I read some old posts about discretionary match and it seems to be that you have to elect what the match is each plan year, so that could be one option, but I am wondering if there are any other options for ways to achieve this.

Thank you.

[Jim Chad]

First check to see if the 50 cent match is in the document. Many times it is only the limit of counting deferrals up to 3% that is in the document and the rest is discretionary. If it is discretionary, all you need is a board or managers resolution to change the match to zero cents.

If it is fixed at 50 cents, amending to discretionary will accomplish what you want.