Over - matching HCE and NHCE in Safe Harbor Match Plan

[KTB]

Using a Sungard Relius prototype document we have a plan that is setup for SH Match of $1 for $1 up to 4% deferral. Recently it was brought to our attention that two employees, one being an HCE, have been receiving more SH match than they should be. The NHCE was deferring 4% up until 7/2011 where he switched to 2%, however, the payroll company continued giving him a 4% Employer match and has been to this date. (we have put a notice out to the payroll company to correct it going forward). The HCE was doing 4% up until 2/2012 when he switched to 2% as well but the payroll company still left his match at 4%. The NHCE has been over-matched about $1545 and the HCE has been over matched by $2261. I am wondering what the correction needs to be based on the document setup. I am thinking we can possibly leave the NHCE $ in, but have to take out the HCE money? Any advice would be great. Thanks!

[BG5150]

I'd correct both of them. Remove the excess plus investment experience and put it in the suspense account. Then use it to offset the next matching deposit(s). I would not send it back tot he company as mistake of fact..

[shERPA]

I agree with BG5150.