Delayed Match for 401(k)

We are redesigning our 401(k) to have a delayed match after 1 year of enrollment / employment. Does anyone have a plan like this that they can share the set-up? Thank you!

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sriman-shivakoti

Do you mean you begin matching after the first year of employment or you hold the match for a year?

megan-dwyer

We would not start the match until after one year.

Legacy Contributor

We have several entities who run their 401/403 plans this way. Here is the thought process and steps behind what we did.

1. We created an HR11 User Field called "Match Eligible", acceptable values being N & Y. We have an auto generated email identifying employees who have LOS >= 1 year with a Match Eligible value <> Y. Our HR Service area then keys a personnel action to add/change the value of Match Eligible to Y.

2. We created 2 employee groups (one called Match and the other NoMatch). The user group definition references the HR11 User field. The match group includes a line of Match Eligible Include Y, whereas the NoMatch group has a line of Match Eligible Exclude Y. (Original we had Match Eligible Include N but we learned the hard way that sometimes the N is missed when a new employee is hired. Changing the NoMatch group to be Match Eligible Exclude Y fixed this.)

3. The BN15 DC plans Contributions were created for 2 employee groups. The one using Match had the matching schedule defined accordingly. The NoMatch had a blank matching schedule.

4. Our Benefits department runs an audit (or receives the auto email, can't remember which) for the emps going from N to Y and are currently enrolled in the 401/403 plan. Benefits enters a new enrollment record for the pay period in which the match should take effect. This will stop the previous deduction and when the new deduction is created it will create the employee deduction and the match deduction since the employee is now in the Match employee group.

If questions please let me know. Typing out the process makes it seem cumbersome but it does run pretty smoothly.

Legacy Contributor

I should also state the the use of the HR11 user field is because we haven't found a way to use Length of Service in an Emp Group. If anyone knows how to do that I would love to know how!

megan-dwyer

Thank you so much.

VID009_User Control_How to add a Leave Trigger on User Fields.zip

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