Assume a 401(k) plan has a discretionary match to be allocated during the plan year as elective deferrals are forwarded to the trustee. How would a typical "true-up" provision be drafted?

It depends on how your plan defines matching contributions. A matching formula that requires a "true up" after depositing on a monthly basis would read "x% of deferrals up to x% of Compensation".

A formula that did not require a true-up would read "x% of deferrals up to x% of Compensation per payperiod". In the second option, there is no true-up and once a participant stops deferring the match stops, which is why in these plans participants that max out early lose out on matching dollars.

In the first option it uses the plan's annual definition of Compensation to calculate the matching, so regardless of why they fell short, there would be a true-up required.

If a plan has a discretionary matching formula, does that mean the employer is not required to true up absent such a provision?

k man,

It's a matter of interpreting the plan document regarding over what period (per pay period? per month? per plan year?) the match is allocated. If the plan's silent, I don't think anyone can give you a clear answer.