401K Match after New Employee Wait Period
My son graduated from college and starts a job June 1. He has a 6 month wait period before he can contribute to the 401k. He can start contributing in December. The employer has a 6% dollar for dollar match.
My question. Is the largest possible 6% match for the year based only on 6% of his December income (1 month) or 6% from June to December (7 months)? For simplicity sake, lets say 6% of 1 month is $100 and 6% of 7 months is $700. If he contributes $700 to his 401k in December, what would the employer match be? I don’t know if this is 401k plan specific or if there is general 401k guidelines for this scenario.
Thanks,
Ray
Permalink Submitted by Alan - IRA critic on Tue, 2020-05-19 17:56
Since wages paid prior to December would be ineligible compensation in most plans with a waiting period, his match would be limited to December paycheck wages. However, he should check with HR to see if the plan has adopted any unusual provisions.
Permalink Submitted by Ray Kaufman on Tue, 2020-05-19 18:01
Thank you.