matching contribution

[Scuba 401]

the employer told employees all year last year that the plan had a discretionary match. the plan has 1000 hours and last day rule requirement to accrue the match. time has come to fund the match for last year and the company has no money. are they required to fund the match or can they just say we can't do the match. it is discretionary anyway.

[12AX7]

The match is discretionary according to your post. In simple terms the employer may contribute according to the terms of the plan, or decide not to contribute for a plan year.

[BG5150]

The employer may have told his staff that there was a "discretionary match." But what does the document say. What the employer says and what the document says aren't always in harmony.

[Bird]

I'm guessing that what Scuba meant was "The plan has a discretionary match and the employer told his employees there would be a matching contribution." In that case, no match is required, but he has to suffer the consequences of poor relations with his employees.

[jpod]

Who is it per the plan document that decides on the match? If, as it is likely, it is the "Employer," who, per the plan document, is to act for the "Employer?" Unless there is a specific provision indicating that the Board of Directors or some other person take some specific action to declare a match, I think at a minimum you have an issue as to whether management's announcement to its employees that there will be a match creates an obligation to fund one, specifically if that announcement influenced behavior (such as by enticing employees to contribute who would not otherwise contribute, or to contribute more than they would otherwise contribute).

[QDROphile]

Agree with jpod.

[Tom Poje]

see also point 3 at

http://www.relius.net/News/TechnicalUpdates.aspx?ID=433