Discretionary Matching Contribution Notice??

Fidelity provided a client with a discretionary matching contribution notice and this was surprising to me as I had never seen or heard of such a thing. After looking around, it appears the IRS never formally announced that this new notice is required. Instead, they may have forced document providers to incorporate this notice into the actual plan document. Has anyone else come across this? Is there a formal regulation that I'm missing or was this a way for the IRS to backdoor regulate plans? Thanks! 

I think it was part of the LRMs for the Cycle 3 restatement.

19 minutes ago, Lou S. said:

I think it was part of the LRMs for the Cycle 3 restatement.

I'm not sure this is accurate based on the articles I have read. This appears to be something the IRS informed document providers of during the review process. 

See here too: https://www.relius.net/news/Docs/Flexible Match Communication.docx 

Thanks. I knew it had to do with the Cycle 3 restatement but did not recall the details.

To add a little more context, after decades of IRS not having an issue with the discretionary match language in these documents, they suddenly brought this up in the review stages of the C3 document. Their objection is that the fully discretionary matching contributions do not meet the requirements for definitely determinable benefits.   Since it was brought up late in the C3 process, the new notice was a compromise to not have to scramble to redesign plans.   My understanding is that the IRS will not make this compromise for the C4 document.

Consider too that whatever the Internal Revenue Service allows under an IRS-preapproved documents regime answers no question under title I of the Employee Retirement Income Security Act of 1974.

A plan’s administrator might want its lawyer’s advice about whether a plan sponsor’s or employer’s declaration of a contribution and its “instructions” about how to allocate the contribution (if the allocation was not already specified) is, within the meaning of ERISA § 104(b)(1), “a modification or change described in [ERISA] section 102(a)” such that the administrator must furnish “a summary description of such modification or change[.]”

If it is, an administrator might carefully write the “communication” the plan’s governing documents require to meet also ERISA’s call for a summary of material modifications.

A plan administrator’s duties under ERISA sections 102, 104, and 404(a) could include writing the summary “to be understood by the average plan participant, and [to] be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights . . . under the plan.” ERISA § 102(a).