Safe Harbor Match True-Up(Down)

[401king]

This is probably more of a question on the process of true-ups than it is a question on the safe harbor aspect.

Employer overcontributed for one of the participants. It's my understanding that a true-up can only result in an additional contribution for participants, and not the distribution on any excess contributions. Is that correct? If so, should we just leave the overage as a safe harbor contribution or change the source to discretionary and run ACP?

[Jim Chad]

You are correct in saying it is not a distributable event.

I think I have mostly seen it forfeited and used to pay part of the next years employer contribution.

[Below Ground]

You can also use to fund other member's benefit which may be short and need to be trued upward.

[401king]

Would both of you be using a withdrawal amount (from the overcontributed account) adjusted for gains/losses? I would think you would have to.