FAQ 625: Match Verification--Adjusting the Account Values screens for under/over amounts

Problem: Safe Harbor Match is remitted per pay period but then a true-up is done at the end of the year. I ran the Match Verification routine and the variances were recorded in LimitADP and Contrib screens. Some people got too much and some got too little which looks right to me. After corrections, an excess contribution of approximately $6,000 should remain which they intend to use to fund the discretionary profit sharing contribution. I want to know the best way to get the Account Values screens to reflect the amount determined by the Match Verification routine. Is there a way to have it put the excess $6k in a forfeiture account and then allocate it as the profit sharing contribution? I figure I can manually input the amounts on the Account Values screens and then track the $6k, but I was hoping the Match Verification process was going to do this for me.

Solution: It sounds like you want to do 2 things: 1) Make the Contributions and Account Values screens equal to one another, and 2) allocate $6K as a profit sharing contribution. Before you do anything, make a copy of the plan so you can go back the original numbers if any of the calculations don't work. Here is then what you will need to do: 1. To make the Contributions and Account Values screens equal, leave the Force Contribution field set to "Yes-Use Transactions/Input by EE". This freezes the amount on the Contributions screen. Change the "Contribution Fund Split" field to "0-Elections". When you run the valuation calculations, the system will then take the amount on the Contributions screen and split it onto the Account Values screens based on employees' fund elections. If there are no elections, it will store it in fund #1. IMPORTANT: Remember that changing the Account Values screens like this overrides what actually happened during the year with the participants' matches. The dollars that were deposited over the year are in the participants' accounts based on their fund elections at the time of the payroll calc and match deposit to the plan. You may want to consider showing a transfer in/out of the match variance amounts on the Account Values screens rather than resetting the contribution amounts to the new match amounts. 2. You can allocate the $6K as a profit sharing forfeiture by creating a participant called "Match variance forfeiture" or something similar. Make this employee a status "F" and input the $6K as a prior balance in the profit sharing source (i.e. source 2). You will need to decide which fund(s) it should forfeit from, and use that fund for the input amount. 3. The Match Verification program is only designed to calculate and report variances. It is not set up to do any reallocation or resetting of values, primarily due the note on the integrity of employee accounts above.