True Up Employer Matching Contributions

businessWith the calendar plan year nearing an end (i.e., plans with a plan year beginning January 1), 401(k) and 403(b) Thrift plan sponsors providing fixed percentage employer matching contributions should carefully review their plan records to determine whether they need to “true up” the employer matching contribution made for any of their plan participants. The "true up" process ensures that the correct amount of employer matching contributions has been made for all participants based on the total annual employee elective deferrals for the year.

Employers sponsoring plans with plan years other than the calendar year should also conduct the same review at the end of their respective plan years.

Employer matching contributions are allocated based on the amount a participant contributes to the plan as an elective deferral (i.e., salary reduction contributions) and are generally made on an ongoing basis, as the participant contributions are paid to the plan.

If matching contributions are made throughout the year as employee contributions are made, some participants whose contributions reach the annual limit for elective deferrals before the end of the plan year will, therefore, also stop receiving employer matching contributions at that time. In that case, a participant's year-end total contributions and the matching employer contributions already made for that participant should be reviewed to determine if the participant may be entitled to an additional matching contribution after the end of the plan year. This additional matching contribution would provide the full matching contribution amount that would have been made if both the participant had been making levelized, consistent elective deferrals and the employer was making matching contributions throughout the year.

Similarly, participants who defer participant contributions at different rates throughout the year may need to receive an additional "true up" matching contribution. These additional matching contributions do not have to be made if the plan requires the employer matching contribution only after the close of the plan year (e.g., if the plan has a discretionary employer matching contribution or an employer matching contribution to which only participants actively employed on the last day of the plan year are entitled).

Regardless of the type of employer matching contribution provided under the plan, all employer matching contributions due for a particular plan year must be applied to participant accounts no later than the applicable deadline. For taxable entities, this matching contribution deadline is the employer's tax filing due date (including extensions) for the tax year, which includes the last day of the plan year; for nonprofit entities this matching contribution deadline is 6½ months after the close of the plan year. In both instances, the deadline can never be later than the last day of the twelfth calendar month following the close of the plan year.

If you have any questions about your organization's employer matching contributions or other plan provisions, please contact your local Mutual of America Regional Office representative, or call 1-800-468-3785.


Before investing, you should carefully consider the investment objectives, risks, charges and expenses of the variable annuity contract and the underlying investment funds. This and other information is contained in the contract prospectus or brochure and underlying funds prospectuses and summary prospectuses. Please read the contract prospectus or brochure and underlying fund prospectuses and summary prospectuses carefully before investing. The contract prospectus or brochure and underlying fund prospectuses and summary prospectuses can be obtained by mail or by calling 1-800-468-3785.

Mutual of America's group and individual retirement products are variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment funds you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should carefully consider a variable annuity contract's other features before making a decision.

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