Is a Non Matching "Match" permissible in an ERISA 403(b)?

[Guest W J Parks]

An ERISA 403(B) Plan states the Employer may make a matching contribution expressed as a % of the amount deferred.

In practice, the ER has made a flat 9% contribution if a Participant made a minimum 3% contribution.

Obviously, they are not following the terms of the plan document and that issue will have to be resolved through one of the voluntary compliance programs.

The real question is: if they amend the plan to conform to their practice will it now be in compliance? Its not really a match in the traditional sense and , except for the 3% minimum elective deferral, it would be a non elective contribution. Is this type of "match" permissible in ERISA for either a 403(B) or 401(k)?

[MWeddell]

I agree that ERISA requires one to have a written plan document and to follow it. However, if the plan allowed for a 9% of pay contribution only for those participants who deferred at least 3% of their pay, that would be a matching contribution and be subject to 401(m) testing. There's no requirement that the amount of the matching contribution vary in proportion to the amount of deferrals.