Accrued to Date testing

[John Feldt ERPA CPC QPA]

Under 1.401(a)(4)-8(b)(2)(ii)(A), the account balance includes an adjustment for amounts that were previously distributed.

I understand this to include any prior distributions, including any hardship or in-service withdrawals, but what about "refunds" due to ADP/ACP testing failures in prior years? Would those be added back as well?

Also, I assume the balance would/should exclude any unrelated rollovers that might have come into the plan although I don't see anything that explicitly says that. Agree?

[John Feldt ERPA CPC QPA]

Has anyone here used the accrued-to-date testing method on a non-safe harbor 401(k) plan?

[Kevin C]

I've used it before, but it's been a few years. I didn't review the valuation system's numbers enough to verify the details of the calculation you are looking at. I think you are on the right track about distributions, that all would be included, regardless of the type. I also think it makes sense to exclude non-related rollovers. The plans we tested did not have any rollovers, so I didn't look at that. Looking at the regs now, I'm not sure you would include related rollovers, either.