Is a year-end true-up employer match supposed to be received the next year?

Question

I was browsing a 401(k) account, which has a year-end true-up employer match and is managed by Vanguard. The employee who owns the 401(k) account joined the firm in 2017, and frontloaded their 401(k) contributions with their salary: we calculated (based on the employee's compensation eligible for 401(k) contribution matching and the employer's matching policy) that the true-up employer match should be strictly positive for the year 2017.

However, looking at https://retirementplans.vanguard.com/VGApp/pe/faces/Contributions.xhtml?gh_sec=y, there is no true-up employer match for 2017, but there is some true-up employer match for 2018 (even though today's date is 2018-06-17, and as mentioned above the true-up employer match is year-end).

Is a year-end true-up employer match supposed to be received the next year?

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Additional information:

• The last paycheck in 2017 was received on 2017-12-21.

Answer 1

Since they can't know how much had to be added until the last paycheck has been calculated, it is likely that the company has to make the true-up contribution simultaneous with the last check, or soon after that last check.

It is not unusual for the last check of the year to be just a few days before the end of the year, therefore there may not be enough time get the contribution made before the end of the year.

The plan documents should describe the timeline for true-up contributions.

I don't see how the timing of the contribution as taking place on 31 December or 02 January makes a difference, unless the employee is also near the limit for total contributions:

Overall limit on contributions

Total annual contributions (annual additions) to all of your accounts in plans maintained by one employer (and any related employer) are limited. The limit applies to the total of:

• elective deferrals (but not catch-up contributions)

• employer matching contributions

• employer nonelective contributions

• allocations of forfeitures

The annual additions paid to a participant’s account cannot exceed the lesser of:

1. 100% of the participant's compensation, or

2. $55,000 ($61,000 including catch-up contributions) for 2018; $54,000 ($60,000 including catch-up contributions) for 2017.