Guest elmo27 Posted November 4, 2011 Posted November 4, 2011 Are parent corporations allowed to make matches conditional upon its subsidiaries satisfying certain conditions? For example, a parent corporation will make a match if subsidiary corp. meets a certain level of safety requirements, customer service, etc.? I have not found any guidance on point on this issue. Any comments appreciated!
QDROphile Posted November 4, 2011 Posted November 4, 2011 How is this not a simply a discretionary match? It sucks the same as any other discretionary match.
austin3515 Posted November 4, 2011 Posted November 4, 2011 "How is this not a simply a discretionary match? It sucks the same as any other discretionary match." Typo? I agree though, if the match is discretionary you can base it on anything you want. All the IRS cares about is that the amount is allocated in accordance with the terms of the plan. Austin Powers, CPA, QPA, ERPA
ETA Consulting LLC Posted November 4, 2011 Posted November 4, 2011 How is this not a simply a discretionary match? It sucks the same as any other discretionary match. 1st - I agree, wholeheartedly, with QDROphile. The basic definition of a matching contribuiton is that it is made contengent on the employee actually contributing to the plan. This is to say that there is no such thing as a non-elective given to only those employees who contribute. Hence, it is a match solely because an employee has to contribute to receive it. Beyond the defintion of match, the discretionary part is determined based on whether it "must" be given or "may" be given. The employer can easily base their "may" as being contingent on whether a division meets a certain standard. As long as it's not hardcoded in the document saying a match "WILL" be given "IF" something happens, then it is discretionary. You will not likely find the exact verbage in the regulations as it's a composite of different rules. Good Luck! CPC, QPA, QKA, TGPC, ERPA
Kevin C Posted November 4, 2011 Posted November 4, 2011 Another item to check is if the plan document will allow the contributions made by each participating employer to be allocated only to its employees. Our VS document allows this. That type of provision paired with a discretionary match should accomplish what you want.
Guest elmo27 Posted November 7, 2011 Posted November 7, 2011 Thanks! This information is very helpful.
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