Typically when a plan deposits on a payroll basis (the document calls for it) we do not true up or even review the calculations/deposits as we do not have access to the "per payroll" info. I think the only exception is when deposits have been made in excess of what is allowed due to the Annual Compensation Limit. The match formula I'm looking at is 100% up to the first 3% plus 50% on the next 2%. For 2004, I've determined that the maximum match should be $8,200 (205000*.03 = 6150 + 205000*.02*.50=2050)

A couple of participants had in excess of $8200 deposited. There are some other differences when comparing the annual vs payroll calculations. I am only suggesting making the the adjustments for participants who had more than $8200 deposited.

Does this seem reasonable?

Does one type of mistake make you suspect another? Are you responsible for compliance, or is someone else responsible?

Why not? Why not make sure the total is correct in all cases, not just for 401(a)(17)? What does the Plan say?

If the plan says matching is on a payroll basis, then we don't attempt to check the calcs. (And we point that out.)

Yes, we check for the maximum. So I think what you suggest is reasonable...provided you are following the terms of the document (that is, that it does in fact say that's how the match is done...I'm sure there's a fair number of plans that operate that way even though that's not how they're written),

The Plan calls for the match to be calculated on a payroll basis so I would expect some differences when comparing on an annual basis. When the plan document actually calls for the match to be calculated this way, we generally don't review when doing the year end compliance work as we only have access to the annual info. I do however check the match for participants whose compensation exceeds the Annual Comp Limit. For example:

Match Formula 100% on first 3% plus 50% on next 2%

Actual compensation is $400,000 with deferrals of $10,000. Based on total compensation, the deferral % is 2.50% and since match was deposited on a payroll basis (as the Plan calls for) the participant received $10,000.

Using the 401(a)(17) comp limit of $205,000 the deferral % is 4.87. I think the match should be limited to $8066.75 (205000*.03 = 6150) + (205000*.0187*.50) and $1933.25 taken away.

Obviously the Annual Compensation Limit issue needs to be addressed with the client for future, right now I'm trying to get the current year work cleaned up correctly.

Thanks