Guest jkrad Posted February 28, 2003 Posted February 28, 2003 If in following the matching formula for a 401(K) plan, a NHCE receives excess match, does this excess get counted in the ADP/ACP?
MWeddell Posted March 3, 2003 Posted March 3, 2003 Why did the NHCE receive excess match? Was it in excess of the match formula stated in the plan document, in excess of the 415 limit, or something else?
Guest jkrad Posted March 3, 2003 Posted March 3, 2003 mwadell, it was an excess of the match formula listed in the plan document.
MWeddell Posted March 3, 2003 Posted March 3, 2003 The IRS regards the failure to follow the written plan document as a disqualification issue. You'll need to correct it using a correction program from the EPCRS. Those correction programs call for placing the plan and the participants in the position they would have been in but for the administrative error. Accordingly, I would lean toward excluding the excess match from any discrimination testing (plus you'll need to remove the excess from the participant's account).
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