FAQ 751: Match Verification--Date of interest calculation on excess


Just want to confirm if I change the interest date on the Match Verification report to a date later than the plan year end, it will calculate gap period earnings. I wasn't sure if it was calculating gap period earnings or something completely different.


Yes, it does include gap interest if the date is after the plan year end, however the best earnings calculation to use would be from the ADP/ACP Test since it is most final.

The calculation is done exactly the same, and depending on your dates entered, it will calculate gap interest.

For example, inputting the date 4/30/2008 caused the Match Verification report to calculate an earnings amount of 1296.79. This is determined based on the following:

Excess match of 9019.65 * 2500.00 (source earnings) divided by source ending balance 26843.70-2500 (source earnings) = 926.28

926.28 * 10% * 4 months = 370.51

926.28 interest on excess
370.51 gap interest
1296.79 total interest on excess as of 4/30/2008