Page 133 - DCAC May 2023 Files

Glossary of terms

Term Description

Match behaviors A matching contribution is a type of contribution an employer chooses to make based on elective deferral contributions that the participant makes. This is
different from non-elective employer contributions that do not require the participant to make a contribution.
When it comes to encouraging eligible participants to participate and contribute more, one of the single most influential plan design decisions an employer can
adopt is the use of a matching contribution to a participant’s deferrals. A single plan can have multiple elective deferral match rules that cover eligible
participants, and they can be based on company division, job type and tenure, among other factors. Additionally, an eligible participant can be covered by a
single-tier (e.g., 100% up to 5% of contributions) or multi-tier (e.g., 100% up to 3% and 50% on the next 4%) formula.
We evaluate the behaviors of participants based on the maximum deferral rate that the employer will match. This is referred to as the match cap. In the
example below, both of these match rules result in the same match cap:
• 1. 100% up to 5% of contributions
• 2. 100% up to 3% and 50% on the next 4%

Eligible employees are mapped to 1 of 4 of the plan match behaviors below:
Not contributing:
• Eligible to participate in the plan and receive employer matching contributions but does not currently have an active deferral on file
Missing out:
• Has an active elective deferral on file but is contributing below the match cap
Meeting the match:
• Has an active elective deferral on file and is contributing at the match cap
Exceeding the match:
• Has an active elective deferral on file and is contributing above the match cap

Rate of return Rate of return is calculated in 1 month intervals based on the opening balance, transaction activity, and closing balance for the month. The calculation is
consistent with the procedures called by the participant website for displaying a participant’s rate of return for a 1 month period. Determining the 1, 3, and 5
year returns is achieved by using an aggregation of the individual monthly rates of return for that period. Only participants with a result across all months in the
period are included.

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