--- title: Can I Pre-Fund a Matching Contribution for a Participant Who Terminated Employment? description: If a participant entitled to a matching safe harbor contribution leaves before EOY, can we deposit that matching contribution ASAP but hold off on the rest? image: https://www.dwc401k.com/hubfs/Knowledge%20Center/Pillar%20Categories%202024/PNG%20-%20with%20category%20name/hero_401_png_category.png --- [![logo](https://www.dwc401k.com/hubfs/_global/logo.svg "logo")](https://www.dwc401k.com/) [![logo](https://www.dwc401k.com/hubfs/Dwc-2019/SVG/logo.svg "logo")](https://www.dwc401k.com/) [![Contribution Limits](https://no-cache.hubspot.com/cta/default/3113501/af3ae025-72b1-41fa-8855-5e196d6c26e4.png)](https://cta-redirect.hubspot.com/cta/redirect/3113501/af3ae025-72b1-41fa-8855-5e196d6c26e4) [![Log in](https://no-cache.hubspot.com/cta/default/3113501/3466ce37-58ba-4a93-bddb-0d4c8bb8ccbc.png)](https://cta-redirect.hubspot.com/cta/redirect/3113501/3466ce37-58ba-4a93-bddb-0d4c8bb8ccbc) [![services-icon1](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon1.png) ## Plan Document A properly drafted document is the foundation of achieving the company's objectives and keeping the plan in operational compliance. ](https://www.dwc401k.com/services/plan-document) [![services-icon2](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon2.png) ## Plan Compliance We have a fundamental understanding of how critical plan compliance is to both the IRS and Department of Labor. ](https://www.dwc401k.com/services/plan-compliance) [![services-icon3](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon3.svg) ## Defined Benefits Services We work with business owners and investment advisors to determine what makes the most sense by providing a detailed cost benefit analysis. ](https://www.dwc401k.com/services/defined-benefits-services) [![services-icon4](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon4.svg) ## Mergers, Aquisitions & Related Company Analysis The DWC team is well-versed enough in the nuances and is ready to help you navigate the situation. ](https://www.dwc401k.com/services/mergers-acquisitions-analysis) [![services-icon5](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon5.png) ## Plan Corrections DWC's extensive experience with both the IRS and Department of Labor voluntary correction programs allows us to help you address just about any accident that might happen. ](https://www.dwc401k.com/plan-corrections) [![services-icon6](https://www.dwc401k.com/hubfs/QOTW/March%202020/services-icon6.png) ## Government Audits Being selected for an audit can feel overwhelming, but the process doesn't have to be. ](https://www.dwc401k.com/services/government-audits) ![service-right-icon](https://www.dwc401k.com/hubfs/QOTW/March%202020/service-right-icon.svg) ## Investment Advisor Support DWC has a long history of successfully partnering with investment advisors. 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[ DWC ](https://www.dwc401k.com/blog/author/dwc) | Published: 08/1/2017 | [Safe Harbor](https://www.dwc401k.com/blog/topic/safe-harbor), [Question of the Week (QOTW)](https://www.dwc401k.com/blog/topic/question-of-the-week-qotw), [DWC](https://www.dwc401k.com/blog/topic/dwc), [Deposit Deadlines](https://www.dwc401k.com/blog/topic/deposit-deadlines), [Plan Compliance](https://www.dwc401k.com/blog/topic/plan-compliance), [401(k) Q&A](https://www.dwc401k.com/blog/topic/401k-qa) ## **Facts** Our company sponsors a safe harbor 401(k) plan that provides for a dollar-for-dollar match up to 4% of pay. At the end of each year, we calculate the total matching contribution, and we usually make the deposit in the late summer. For example, we deposit the matching contribution for 2017 in August or early September of 2018. ## **Question** If we have a participant who is entitled to a matching contribution and terminates employment before the end of the year, is it ok for us to deposit that one person’s matching contribution when they terminate but still hold off on depositing everyone else’s match for this year until August of next year? That would allow the departing employee to take a full distribution of his or her account immediately rather than having to go through the distribution process a second time next year. ## **Answer** There are two perspectives to consider in answering this question — the[ plan compliance](https://www.dwc401k.com/qualified-plan-compliance) perspective and the process perspective. From a compliance point of view, this shouldn’t be a problem if the terminating participant is *not* a [highly compensated employee](https://www.dwc401k.com/knowledge-center/who-are-highly-compensated-and-key-employees). Otherwise, it could be considered discriminatory. From a process standpoint, if you do pre-fund the matching contribution for a single individual, it is critical that you have a mechanism in place to track it so that you remember it when it comes time to deposit the rest of the match for everyone else next summer. Otherwise, you could accidentally deposit the match for that person a second time. It is important to note that this type of pre-funding is not permitted if the plan imposes additional allocation requirements to share in the company contribution such as a requirement to be employed on the last day of the year. Safe harbor contributions cannot be subject to that type of requirement, but regular (non-safe harbor) matching contributions and profit sharing contributions can be. For more information on the deadlines for depositing company contributions, please visit our Knowledge Center [here](https://www.dwc401k.com/knowledge-center/deposit-deadlines-for-401k-company-contributions). 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