Catchup Contributions Not Matched

[Guest cke66edy]

The plan document (restated in 2002) provided for a match of catch up contributions (safe harbor match). They have never matched catch-up contributions. Any suggestions on how to correct are appreciated.

[Kevin C]

Can you give us more information? What is the SH match formula? Which limit triggered the catch-ups?

[Guest cke66edy]

They capped deferrals at 12% but I believe the catchup was triggered by 402g in all situations. The SH match was 100% first 3% and 50cents next 2%. Thanks for the assist.

[rcline46]

I am at a loss as to how catch ups were not matched in this situation. Match is only on 5% of pay, and I cannot see any situation where 5% would have triggered a catchup. Ok, a bad failure in ADP testing MIGHT do it, but since givebacks are $ down, probably not likely.

Can you show an example where a recharacterized contribution to catch up was not matched?

[Kevin C]

With the match only applying to deferrals not in excess of 5% of compensation, I don't see how 402(g) triggered catch-up would have been matched anyway because of the SH match formula. If you go back through the prior years, the 402(g) limit has been more than 5% of maximum comp since at least 2002. 16,500 / 245,000 = 6.73%, 15,500 / 230,000 = 6.73%, ... 11,000/200,000 = 5.5%.

Your plan imposed limit is 12% of comp for deferrals, so everyone can defer enough to receive the full match before they hit the limit.

If the catch-ups were all triggered by 402(g) or the plan imposed limit, I don't see anything you need to correct.

It would be very difficult to have a situation where catch-ups would be triggered for deferrals below 5% of compensation. Hitting 415 is the only thing I can think of that might do it. Even then, you would want to allocate the SH match first, so I doubt it would be a problem.

[ETA Consulting LLC]

It would be very difficult to have a situation where catch-ups would be triggered for deferrals below 5% of compensation. Hitting 415 is the only thing I can think of that might do it. Even then, you would want to allocate the SH match first, so I doubt it would be a problem.

I'm pushing the "like" button. Another situation I've run into what when an ADP test failed and deferrals were reclassifed as catch-up. They would, then, not be entitled to the match after reclassification to catchup. But, below 5%; never saw it.