Late Matching Contributions

[kmhaab]

Should late matching contributions be adjusted for earnings?  Are matching contributions "late" if they are deposited within the time period specific in the plan document, but later than the employer's established practice?

An administrative error resulted in a failure to make matching contributions on a bonus payment at the end of February. Error was discovered in May and matching contributions were calculated and deposited in participants' accounts at that time. Plan document states that matching contributions shall be paid to the Trustee no later than the Form 5500 filing due date. The practice has been to make matching contributions each pay period at the same time as employee contributions. The plan provides for a match true-up at the end of the year.

Should the matching contributions deposited in May have been adjusted for earnings from the date they would have been deposited if the error had not occurred?

[imchipbrown]

Barring some regulation I'm not aware of, I don't see anything here that makes them "late".  I'm aware of a rule that says matching contributions are due before the end of the year following the year they are accrued.  The documents seems to favor an earlier date but an "established practice" outside the document wouldn't hold any water in my book.  (I may have an old book.)

I'd have a problem if HCE's customarily got matched each pay period and NHCEs got their match a year later.

 

[Bird]

9 hours ago, kmhaab said:

Should late matching contributions be adjusted for earnings?  Are matching contributions "late" if they are deposited within the time period specific in the plan document, but later than the employer's established practice?

No

[kmhaab]

Thank you both.

[Gilmore]

Probably not relevant since there was no mention that this was a safe harbor match, but there is a timing requirement for safe harbor match allocated with each payroll.