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You would still have the run the 401(k) test and see how much of a refund would be due - if it's 7500 or less, then you could do it that way where the "refund" instead gets recharacterized. An issue could arise if you have multiple HCEs at varying rates/amounts, because of the way the refunds are determined - they come down to a level dollar amount for all HCEs before considering whether anything could then be converted to catchups. In other words, if he's the only HCE, then 12,500 would work. If he's one of many, then it's not as clear-cut because it's dependent on the other HCEs. If there's another HCE at 200,000 doing something similar then the math does not come out the way you'd want.

What happens when someone with an existing loan incurs a seasonal layoff? Like CBZ asked, are they considered on leave with repayments suspended? Or does the plan allow direct off-payroll repayments from the participant? Absent any specific plan/loan program documentation otherwise, I would likely treat similarly. But, ultimately, the Plan Administrator has the authority/obligation to reasonably interpret the plan.

For what it is worth, since 1982 I have been on the wholesale side of the group business, working with many brokers of all types. I cannot recall anyone complaining during any of the shutdowns.

I don't have a ton of experience on these but I suspect not. If the filing has been made, can be proven/documented, and correction measures were of the pre-approved sort, then I see no issues if such a letter was delayed. If the desired correction was more aggressive or "outside the box" then if there was an examination before a closing letter was received, either the issue would be deferred to the EPCRS process and excluded or the EPCRS application maybe gets accelerated into the examination and resolved then. If you know the issue is resolved and just need the letter, even less an issue I would say. The potential downside for a client on delayed closing letter receipt is if they are waiting on letter before completing a relevant correction and the passage of time results in an increased cost of correction (e.g., attributable earnings).

Is it possible that the participant would be considered to be on a leave of absence which would allow them to suspend repayments under 1.72(p)-1 Q&A-9 (assuming such suspension is permitted by the plan)?