Ending Discretionary Match Mid-Year

Plan provides for a discretionary match (no safe harbor). Match funded payroll basis but is based on year end — so a true up may be required. April 1, 2025 employer stopped the match — participants were notified the match would cease as of 4/1/2025. TPA never amended the document to remove the plan year calculation so…. [1] the match for Jan 1 to March 31st would need to be calculated based on annual compensation — correct? [2] Auditors doing the 5500 audit and stated the participants who entered after 4/1 need to get the match. According to them this is a discrimination issue — here is where I am looking for some assistance. Discretionary means it can stop/change at any time. Participants who entered after 4/1 do not get a match — this would not be a benefits rights and feature issue — do you agree? ACP Testing would be for the full year, but those that entered after 4/1 are not included in the ACP Test — do you agree?

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