FAQ 104: 410b--Terminated employee with match contribution showing as not benefitting

Problem: Match is allocated to participants w/1000 hours and employed on the last day of the plan year. The plan fails 410(b) with this requirement. We allocated a match to a terminated employee w/> 1000 hours. When we rerun 410(b) with his forced match, ASC does not pick him up as benefiting.

Solution: The 410(b) match test is looking at the Source 3 plan specifications, and the groups eligible for a contribution are only 34 (status ABC). If you add group 6 (status M) to the Source 3 specs and rerun the 410(b) test, it should show this employee as benefiting.