match as contribution or cash?

403(b) Plan sponsor wants to start offering a discretionary match in 2019.  The formula they are considering is dollar-for-dollar match up to $250, determined each quarter.  Participant's could received a maximum match of $1,000 for the year.

They want to throw in a twist:  They participant's can take the match either as a contribution to the plan or have it paid to them as cash each quarter.  Is that acceptable?  I think we could try to do something like this if it was pertaining to a PS contribution and we have each participant as a separate rate group.  But for a match, can that option be available?

Thanks

No that is not a match, that is a Cash or Deferred Agreement (CODA)  and would be treated as a 401(k) contribution by the employee and not a matching contribution as I understand it.

Agree with Lou S., but effectively the employer is paying higher compensation (which the employee can elect to put in plan, or not) if the employee makes elective deferrals. I think this would violate the anti-conditioning rule of 1.403(b)-5(b)(2).

If I am understanding this correctly, if the business really wanted to do this, there would really
NOT be any employer contribution to the plan.  Individuals who wanted this "Employer" contribution deposited into the plan would have this initially paid to them and they would defer into the plan. If they did not want it in the plan, then it would simply be additional pay for them.  Either way, it is not an employer contribution.

With all that said, could they still do this?

This is a 403(b) plan so no problem with 401k testing issues.

Santo, you'll need to make your own analysis based on the facts (of which I have only your brief description above), but I would urge you to review the regulation I cited above regarding the 403(b) anti-conditioning rule, including the cross-reference to the anti-conditioning rule as explained in 401(k) regs and made applicable to 403(b) by the cross-reference.