Very large excess contribution

[Guest alcharles]

Notified by letter dated 12/30 that my 1998 401K contribution was in excess by nearly $9000 (nearly my entire 1998 amount) due to compensation and the plans failure on ADP/ACP. It looks like the company did not comply with regular testing as this was a complete surprise to me. To complicate matters, I have since left the firm and the excess was rolled over into an IRA. I imagine that this will occur again next year.

I was in a subsidiary organization an an executive and in a different plan than the executives in the corporate office, who were not affected by this. Please point me in a direction for counsel. Thank you.

[Guest]

tough call. based on your info, am assuming no HCE from one company is in both plans. It is permissable that testing be done done separately or aggregating the plans. It sounds like in your 'plan', you were the only HCE and there were lots of NHCEs not deferring, while the other 'plan' had no such problem. I am guessing that the administrator looked at the possibility of aggregating plans for testing purposes, and found that the plans would fail and all HCEs would have refunds, and thus chose to test them separately, but that is only a guess.

just can't say w/o more details.

normally testing results are not provided to individuals, but I suppose you can always try asking for more details on why the tests failed - it never hurts to ask - (you may have to pay for copies of the test if they even offer them)

if indeed the test failed, then the IRA rollover was not permissable and things will have to be reversed, etc...