Contributed too much to Safe Harbor

[KateSmithPA]

Plan was effective in 2002. A safe-harbor plan using the 3% non-elective.

Employer did not understand he had to limit his compensation to $200,000 and contributed 3% of his total compensation which was over $300,000. Most the contribution was made prior to year-end.

What is the correction for this?

Thanks.

[Tom Poje]

Ha! The 'doctor' from Maryland

appendix B section 2.06 of Rev Proc 2002-47 provides the self correction method.

reduce (w adjustment for gains/loss), place in suspence account and allocate the follwoing year [unless this amount would have been allocated to others - e.g. a profit sharing contribution instead of safe harbor

[KateSmithPA]

Thanks, Tom. I only wish I were smart enough to be a doctor!