Overpayments and Underpayments in 401(k) plan

[Guest Bearlee]

I have a plan where there were some participants overpayments and some have underpayments (of both deferral and match monies) due to administrative error in the allocation. Simply put, the plan is jacked up and there are many issues deeper than this one.

But looking at EPCRS, the correction methods in Appendices A and B don't appear to squarely fit this circumstance. EPCRS seems to focus on exclusion of eligible employees for their share of allocation or contribution. Plus, Section 3 earnings adjusments in Appendix B says the calculation for lost earnings is only to be used for underpayments, not overpayments (corrective reductions).

I'd appreciate any help. Thank you in advance!