Sir LB

Thank you for your response.

If a participant has excess deferral, and when calculation the gain/loss the participant incurs a loss. I thought the proper procedure was to refund the full amount back to the participant and the loss was reported on the participants taxes. per the below, I this method might not be correct. (2007) IRS Publication NO 525 Elective Deferrals Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you . Include the loss as a negative amount on Form 1040, line 21 and identify it as "Loss on Excess Deferral Distribution". Please advise if the amount should be reduce by the loss.

I thought going forward ie 2016 and on, any forfeiture money could not be used to fund/offset safe harbor contributions.

The plan is a safe harbor match, with on going safe harbor matching contributions. The plan inadvertently miss calculated the match for 5 participants IE the five participant received to much safe harbor match. Is the proper way to correct the excess match to forfeit the excess match to the plans forfeiture account (calculate gains/losses). The forfeiture safe harbor match can only be used to offset plans expenses going forward.