401(k) with X-tested PS with corrected salary deferrals

[dmb]

Plan failed ADP test, one of the 10 HCEs had some of their salary deferrals returned to pass the ADP test. When performing the ABPT test for the X-testing can i use the corrected salary deferral for that participant or must i use the original deferral amount? Thanks.

[Tom Poje]

The general consensus I've seen views the person as actually having made the deferral and then receiving a distribution, so you have to count it all.(They still count toward the annual addition limit and still count in determining if a top heavy minimum is due) If the amount had been a catch-up, then it would 'vanish'

[dmb]

Thanks Tom, that was my recollection from way back, but just wanted a little confirmation. Thanks.again.