Discretionary match--how discretionary?

[BG5150]

I have a plan that allocates a discretionary match on top of the SH match.  Max up to 4% of pay.

Last year, we had one owner deferring and no staff deferring.  No problem.

This year we have the owner and another HCE who is deferring.  Can I structure my discretionary formula to be: 

Owner and staff 100% deferrals up to 4% of pay; non-owner HCEs 0% 

[Tom Poje]

instead, let's say you have a discretionary profit sharing.

would you say you could give 4% to owner and staff and 0% to non owner HCE or would you say you have to have it clearly defined in the doc that they are in groups?

[Kevin C]

What does the plan say?  Our VS document allows a discretionary match of either a uniform percentage of deferrals or as a flat dollar amount for each participant and allows the match to be applied only to deferrals not in excess of a discretionary amount determined by the Employer. That provides a lot of flexibility, but doesn't allow you to vary the match formula by person.  I've never seen a discretionary match provision that would let you do what you want. 

If they are concerned about giving additional match to the non-owner HCEs, amend the plan for next year so they don't share in the discretionary match.