ratherbereading Posted January 8, 2015 Posted January 8, 2015 Thank you in advance for all responses -- Client began matching in July 2014 (plan was not amended - that's just when they began matching again). One HCE had maxed out at $17500 in June, therefore the client did not give him a match contribution for 2014. Is this allowable? Match is discretionary and there is a discretionary cap on the match. No conditions to share. 4 out of 3 people struggle with math
rcline46 Posted January 8, 2015 Posted January 8, 2015 The document should say if the match is computed on a per payroll, monthly, quarterly, or annual basis. Once you have that, then you have your answer.
ratherbereading Posted January 8, 2015 Author Posted January 8, 2015 The document does not specify! 4 out of 3 people struggle with math
chc93 Posted January 8, 2015 Posted January 8, 2015 You say "began matching again". Is there past practice for calculating the match?
ratherbereading Posted January 8, 2015 Author Posted January 8, 2015 I'm not sure. We just took over the plan from another TPA. The previous 2 years there was no match. Not sure before that. 4 out of 3 people struggle with math
Tom Poje Posted January 8, 2015 Posted January 8, 2015 does the document mention a possibility of a true up, and when you say 'document' are you talking about an adoption agreement or basic plan document?
QDROphile Posted January 8, 2015 Posted January 8, 2015 Read the document more closely. Absent a specific provison for periodic matches, the terms relating to match usually refer to the plan year. It will not necessarily say that the match is based on the year in the same way that it would say the match is based on a payroll period -- the year is the presumptive measure. In any event, the plan administrator or other fiduciary should have authority to interpret the document and determine the relevant measure. You have a separate problem with "that's just when they began matching" and the problem is worse if the period for the match is not the year. What stopped the match and what was provied for stating the match again? for example, if the plan was simply amended to stop the match, no one gets a match for 2014. Maybe you have the abomination of a discretionary match. Good luck with that.
ratherbereading Posted January 8, 2015 Author Posted January 8, 2015 No mention of true ups and I am referring to the adoption agreement. Do not have the basic plan doc. The exact language is, "The computation period for determining the Employer matching contributions shall be determined by the Employer at the time that the amount of such contributions are determined." 4 out of 3 people struggle with math
QDROphile Posted January 8, 2015 Posted January 8, 2015 ERISA is all about the plan terms. You cannot even begin to deal with operational issues with first identifying all the relevant plan terms. You can't do that without all relevant plan documents.
Belgarath Posted January 8, 2015 Posted January 8, 2015 ASSUMING the document allows complete discretion as to the amount, timing, and computation period for the match, I don't see anything inherently wrong with this. Since excluding a HC, probably will help with ACP testing results. I'm also assuming document previously allowed the match, but the employer simply didn't do it - which is fine if it was totally discretionary. As mentioned by previous posters, having all plan documents is a must to accurately determine what you can and can't do.
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