Returns of 415 excesses

[BG5150]

In the plans I have taken the time to notice, the remedy to fix a 415 excess seems to be to refund deferrals first, the ER contributions such as match then Profit Sharing (assume no voluntary contribs).

Why is this? It seems to penalize the employee (higher taxable income) for the employer's generosity (a big match, PS, what have you).

Is there any rationale as to why deferrals are commonly taken first?

[J Simmons]

If I understand correctly the situation you are asking about, returning elective deferrals (and match) first lets the employee get the full measure of the employer's non-matching contribution.

If the non-matching contribution were forced out, to whom would be forced out? To the employer that contributed it. The employee wouldn't have any part of it, not even the amount remaining after the taxation.

At least by returning the elective deferrals first, after the employee pays the tax he or she has what's left over.