401(k)ology: Annual Match True-Up

Summary

Annual true up contributions are a good thing for plan participants because the provision ensures that each participant receives the full match for the plan year regardless of when they make deferrals throughout the year. Not all 401(k) plans that provide matching contributions include an annual true up provision. In fact, many plans calculate and fund the employer match on a per pay period basis, so a participant that defers only part of the year may be leaving employer match money on the table.