Match Allocation vs Formula Condition

[justatester]

Here is a strange one...

Employer Matching Contributions. Employer Matching Contributions on behalf of a Participant shall be made at a rate of $1.00 for each $1.00 of Eligible Elective Deferral Contributions made by that Participant during the Plan Year, as determined under 5.4-1.

5.4-1 Eligible Elective Deferral Contributions. Only Elective Deferral Contributions for the Plan Year of less than or equal to the first four percent (4%) of a Participant’s Compensation that remain in the Plan through the Anniversary Date (the “Matchable Contributions”) shall be eligible to be matched by Employer Matching Contributions. Catch-up Contributions are not eligible for Employer Matching Contributions under any circumstances.

Basically, if I am still employed and took an in-sevice withdrawal, the company is not matching my pretax contributions.

Would you considered this an allocation requriement? Therefore would not be included in the ACP test and counted as not benefiting under 410b.

[ETA Consulting LLC]

That is a good one. I'd say they are still included in the ACP test. When you look at the language, "would receive a match if you are to defer" the withdrawal feature is merely treating the participant as if he did not defer. Hence, he would have received the match had he actually deferred and left the funds there.

Good Luck!

[austin3515]

I think it's an allocation condition, and would need to pass coverage. I assume you have a DL? Otherwise I'm wondering if this is a permissible condition? I don;t know one way or the other, but curious if anyone else does.