ADP refunds and 401(g) refunds

[Guest DWH]

I have a non-calendar year end 401(k) Plan (04/01/06-03/31/07). One of my HCE's went over his 402(g) limit for 2006 and has already been refunded the excess (about $900). I have just completed the ADP test for the 03/31/07 plan year and the same HCE has to return around $250. Do I need to refund this employee the additional $250+ or can I use part of the excess 401(g) contribution that has already been refunded to him.

[Tom Poje]

check out page 123 of the following. it will answer you question. yes, you can reduce excess contrib by amounts previously distributed for excess deferrals.

These are the final 401k regs (plus preamble)