Matching Allocation

[Guest swiantj]

I have a match formula of 100% on the first x% of deferrals with x being discretionary. I can do this easily in the match screen of the plan specs. However, if I want to allocate $100,000 in this manner, I've run into problems.

The system will allocate the 100,000 pro-rata on deferrals if I use the discretionary match - not what I want. If I put a value in for x the system ignores my entry of 100,000 in the transaction screen. Any sugestions?

[Guest]

I do not understand what you are asking.

comment 1 says

100% up to x% of deferrals

In other words, if x = 5 I will get one figure and if x = 6 I would get another figure.

Then comment 2 says, I want to allocate $100,000.

I can (at least as far as I know) cap my deferrals at x% (e.g. 5 or 6) but I can't put a further restriction on it as saying 100%.

Mathematically that would be impossible. 100% of x% deferred is a locked-in value, you can't also say, oh by the way, make sure it comes out to allocate 100,000.

I would expect my plan specs to read (right side of screen)

discretioary match $ (not %)

match contr $ amount 100,000

max deferral % 6 (or whatever %)

[Richard Anderson]

If I understand what you want to do, I think it will be a trial and error calculation. You don't know what x is, but want the total match to be $100,000. I think you have to use a value for x, such as 5%, then see what the total comes out to be. If the total is less than $100,000, then increase x, until the total is 100,000. I don't think that the system can do the calculation. It will take several iterations, using different values for x.

[Guest swiantj]

Richard, you are right that it is an iteration process, (Which I was hoping the system could handle) which I have solved in excel. My solution of a 100% match on the first 1.6578923 percent of deferrals, however, presents another problem. I can't enter this level of precision into the system. It looks like I will have to import my excel calculated contribution.

Tom, I hope you understand the question now.

Any other suggestions would be appreciated.

[Richard Anderson]

Here's what I've been doing in this case: If I want the match to be 30,000, but because of quantech precision it comes out to 30,002.55, I will manually enter a match of 2.55 less for one or more of the HCEs. The plans I work with are smaller and don't have $6,031,754.90 of eligible compensation, as yours does. I don't know how far off this method will be from 100,000, but it might be close.

[Guest swiantj]

Thanks Richard,

I chosse the import option since I was dealing with over 400 participants.

A Relius rep did say that they may increase the percision allowable in this field in the plan specs for the safe harbor match. Maybe that will allow me to let the system allocate in the future, but I'll still need to export and do the backsolve calc in excel.

Thanks.