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.