ADP Refunds Overcalculated - How to Correct?

[Guest Chaffee]

In reviewing the 2008 ADP / ACP Test Results for a Plan, it was noted that certain payroll periods were "miscoded" (e.g. a January 2008 Payroll was "miscoded" as a December 2007 Contribution). This resulted in the deferral percentages for 2008 being understated, and the 2007 percentages being overstated. Upon review of initial 2007 test results, other data errors were noted.

At the end of the day, the 2007 ADP Refund for HCE "X" was overcalculated by approximately $1,200 (and since it was completed before March 15, 2008, a 2007 1099 was issued).

Is there any guidance on how this participant could be "made whole" for the improper refunds attributable to the 2007 Plan Year?

Would this participant receive an amended Form 1099 for 2007, or is that "window" closed by now?

Are there any methods people have used to make the participant whole for the lost deduction in 2007, that may not involve the need to amend a prior return?

Would an improper ADP Refund in any way be treated similarly to the "missed deferral opportunity" correction under EPCRS? For example, when a participant is improperly excluded from the plan for a portion of the year, the correction is a QNEC equal to 50% of the "missed deferral opportunity", plus any applicable Match. Would this type of situation follow a similar pattern, in that a participant was "shortchanged" of a deferral opportunity?

Any thoughts would be appreciated.