ACP Failure

[Guest esaade]

Client has a plan year ending 12/31/08 and has now elected to make a discretionary match to the plan. Based on the amount the client wishes to contribute, the ACP test is projected to fail.

Can the allocation of ER Match be reduced for the HCEs that would be scheduled to receive a refund of excess aggregate contributions, thus avoiding the 10% penalty and the return of the excess contribution to the participant? I'm getting two different opinions on this matter. Thanks.

[Tom Poje]

you have a document

you follow the terms of the document

if it says HCEs are eligible to receive, what reason is there for not providing the match?

none.

they must receive and then you fail and correct any such failures.