My spouse's new employer has a retirement savings plan that blurs the line between employee and employer contributions.
Upon employment, employee makes an election to participate in the plan at a 5%, 10%, etc., up to 25% level. This election can be altered once every five years. Employee's compensation is reduced. The amount of the salary reduction is contributed to the profit sharing plan, such that the amount of the contribution is the indicated percentage of the employee's remaining compensation.
Either the plan is structured to turn employee contributions into employer contributions, and so let the employee contribute up to the higher employer limit, or this is an invitation to make excess employee contributions that the IRS will eventually claw back.
Have you seen this before? Is it legit?