"Make Up" Match Several Years Later

[Flyboyjohn]

Employer fell on hard times and suspended their match but informally promised participants that when their financial situation improved they would make up the missed matching contributions.

Employer is now ready to make up the missed matching contributions and several participants are no longer employed.

Is there a 415 problem with making contributions for participants who have no current compensation so long as the employer designates the contributions as relating to prior years when compensation would fully support the contributions?

This is a tax exempt employer so there's no 404 deduction issue.

 

[ratherbereading]

Is the match discretionary? If so, they aren't obligated to make it even though they promised.  If employer contributions are deposited more than 30 days after the federal tax return due date, these contributions will count toward the 404 (I know you said that's not an issue) and 415 limit for the following year. If the employer contributions are deposited after the federal tax return due date, the 404 and 415 limit could need closer review and potentially be problematic

[K2retire]

Why not give the "match" as a bonus to the former employees?

[Luke Bailey]

If this is truly (under the plan documents, board resolutions, etc.) not an obligation, then it would be a problem because all the 415 facts would be this year. If there was an obligation in the prior year, so that this is an EPCRS correction, then 415 would relate back to prior year for comp and deferrals.