Discretionary Match Contribution

[Nassau]

Can a plan with a discretionary match discriminate against a certain group of HCEs? My client may want to provide a match to all participants, including HCEs, except for their owners. Is that possible? This client is using a Protoype Preapproved Document.

[12AX7]

I would rather not use the words "discminiate against", however a plan may be setup to exclude certain groups from getting the employer match. In the case of having HCEs excluded from the Employer Match, this will not be a 410(b) testing issue and will help your ACP test (assuming a traditional (k) plan exists).

However, if the plan is Top Heavy, and the excluded HCEs are non-Key Employees, then a TH allocation may need to be applied to the group.

You indicated that the client is using a Proto Document. If using a Non-Std Proto, you should be able to use class exclusion language for the HCE group the client wishes to not allocate the match to.