So I just got my hands on my DH's 401k plan. Prior to this he had told me he get's a 7% match but reading this I think he was mistaken. I've copied the relevant section below, would you mind reading it so I can test my understanding.
Match appears to be: 100% of the first 3% of contributions and 50% of the 3-5% of salary contributions. It also appears that they calculate at the end of the year- so an automatic "True up." If this is so YAY us for being able to front load.
I do not understand this part "the discretionary additional matching contribution will not apply as to
elective deferrals exceeding 6% of your compensation. The total amount of this discretionary additional matching contribution will not
exceed 4% of your compensation."
For the part I think I understand that would mean if he made $100,000 /year he would get a total match of $4,000 (100% of the 1st 3%= $3,000 + 50% of the next 2% = $1000)
From the 401k handbook:
Employer contributions that will be made to the Plan and how your share of the contributions is determined.
What is the safe harbor contribution?
Safe harbor 401(k) plan. This Plan is referred to as a "safe harbor 401(k) plan." Before the beginning of each Plan Year, you will be
provided with a comprehensive notice of your rights and obligations under the Plan. However, if you become eligible to participate in the
Plan after the beginning of the Plan Year, then the notice will be provided to you on or before the date you are eligible. A safe harbor
401(k) plan is a plan design where the Employer commits to making certain contributions described below. This commitment to make
contributions enables the Employer to simplify the administration of the Plan by ensuring that nondiscrimination regulations are met, which
is why it is called a "safe harbor" plan.
Safe Harbor Matching Contribution. In order to maintain "safe harbor" status, the Employer will make a safe harbor matching
contribution equal to 100% of your salary deferrals that do not exceed 3% of your compensation plus 50% of your salary deferrals between
3% and 5% of your compensation. This safe harbor matching contribution is 100% vested (see the Article in this SPD entitled "Vesting").
For purposes of calculating this safe harbor matching contribution, your compensation and deferrals will be computed for the Plan Year.
Discretionary Additional Matching Contribution. The Employer may make a discretionary additional matching contribution. If the
Employer makes a discretionary additional matching contribution, the discretionary additional matching contribution will not apply as to
elective deferrals exceeding 6% of your compensation. The total amount of this discretionary additional matching contribution will not
exceed 4% of your compensation.
For purposes of calculating this matching contribution, your compensation and deferrals will be computed for the Plan Year.