Match (yet to be made) and ACP Failure

[Gadgetfreak]

A plan has a match formula in the Document for which they only make once a year after we do the calculation. At the same time we do the match calculation, we run the ACP test using our calculated numbers. In this case, the ACP test fails using the numbers we projected but were not yet made.

Does this need to be done in chronological order (i.e. they make the match and then ACP returns/forfeitures)? Or can any steps be saved in the process and, if so, what?

We know that to handle the ACP returns, unvested match amounts get forfeited and vested amounts are distributed.

Thank you.

[ETA Consulting LLC]

Yes, you make the contribution and then issue the refund to the appropriate individuals. When the document prescribes a match, there is not exception to making it (outside of one that is actually written into the terms of the plan). To do so would be to fail to make contributions pursuant to a definitely determinable formula as outlined in the plan.

Good Luck!

[Tom Poje]

for instance , some documents contain the following language

Excess Elective Deferrals and Excess Contributions Not Required to Be Matched. Notwithstanding the above, to the extent Non-Safe Harbor Matching Contributions (including Qualified Matching Contributions) are contributed on an annual basis, no Non-Safe Harbor Matching Contribution (including Qualified Matching Contributions) will be required with respect to that portion of an Elective Deferral which for that Plan Year is determined to be either an Excess Elective Deferral (unless the Excess Elective Deferral is for a Non-Highly Compensated Employee) or an Excess Contribution.

........................

You did not say the ADP test failed, so it is also possible you could shift some deferrals to the ACP test. and lessen or eliminate the ACP failure

[12AX7]

Another twist is where the annual match contribution is made after the deadline to refund excess contributions and the ADP and ACP tests fail.