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Showing results for tags '402g limit'.
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I've a confusion regarding 402g excess deferral. If there are any excess deferral contribution amount then excess contributions must be refunded within April 15 (no tax required). Do I need forfeit any match contribution related to this excess deferral contribution? I've attached an ASC generated report where it shows $14 attributable match need to be forfeited. Please share your thoughts. Thanks for any insight.
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A NHCE participant was proactive for 2017 and realized his deferrals into two unrelated plans were over the 402g limit and requested a distribution of the excess. The distribution was done from the currently employed plan that we administrate. From the 401k Plan Fix It Guide: Excess deferrals distributed to highly compensated employees are included in the Actual Deferral Percentage (ADP) test in the year the amounts were deferred. Excess deferrals distributed to nonhighly compensated employees aren't included in the ADP test if all deferrals were made with one employer. (Emphasis mine) Just so I am doing this correctly, the overage stays in the ADP total for the year because of the unrelated plans? I guess that makes sense... the employee could manipulate the two unrelated plans if they were devious.
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I am swirling in a little confusing. We have a employee that is in two unrelated plans that we administer. Because we administrate both plans, I can see that he deferred 24,000 in Plan A, and 350.00 in Plan B. My original thought was to distribute the 350.00 as a 402g error and be done with it. (We did email the employee and let him know the error) But, being the deferrals are in two unrelated plans, am I needing direction from the employee? What's the deal with the March 1 deadline in the plan document? What if I never knew the 350.00 deferred to Plan B? I'd move forward like normal.... Do I cut a check for 350 plus earnings, issue 1099-R for 2017 and be done with this? What are your thoughts?
