401(k) “Additional Company Match Contribution”

My girlfriend received the strangest letter in the mail at the beginning of the month, it said that her company’s Employee Retirement Savings Plan (fancy term for 401k) has a feature called [Company Name] Match. My interpretation of the letter was that if you don’t contribute enough pre-tax to your 401k, the company match feature will pay out enough so that you get the maximum company match had you contibuted more pre-tax. The letter came from the company servicing her 401k (T. Rowe Price Retirement Plan Services, Inc.). I’ve typed the letter in its entirety (removing company name and specific dollar amounts) and I want to know what you guys think. Does this sound too good to be true or have I misread it?

[Company Name] Employee Retirement Savings Plan
Additional Company Match Contribution

Dear M,
The [Company] Employee Retirement Savings Plan has a feature known as the additional [Company] Match. This feature ensures that each participating employee on December 31st of a given year receives his or her individual maximum company match contribution for that year.

The Plan calls for [the Company] to contribute 50 cents for each dollar that a participant contributes, up to certain Plan or IRS prescribed limits. There can be situations where an employee could receive less than their individual maximum company match contribution as a result of the employees’ rate(s) of pre-tax contirbution during the year. The additional [Company] match feature ensures that employees receive their individual maximum company match contribution for each Plan year.

Once all 2004 company match contributions were deposited, we determined whether additional company match contributions needed to be made to any employees’ accounts. In the second quarter of 2004, additional company match contributions for the 2004 Plan year were deposited into the accounts of any employees who had not received their individual maximum.

Accordingly, your second quarter statement will include an additional 2004 company match contribution of $xx.xx. This amount will be shown in the Contributions section of your statement under the headings of “[Company] Match - This Quarter.”

… [removed some contact information]

In thinking about it more, she started the job mid-year so she missed out on company match for the first six months of the year. She has contributed enough money that she’d get that had the same amount she contributed in total had been spread across the twelve months of the year. I’m inclined to think that’s the case, but if not, doesn’t that sound too good to be true? You can contribute less and still get the max company match? And if that is the case, isn’t that especially generous of her company?

I’d love to hear anyone’s thoughts on this…