ADP Test Question - Plan Imposed Limit

[pholosofizer]

I have a plan that has defined imposed limits on elective deferrals. There are HCEs that went over the limit (and already used their catchup).

Question - would the amount over the plan imposed limit be included in the ADP test for the HCEs? For NHCEs it definitely would not be but for HCEs, it's unclear. I could only find reference to amounts over the 401(a)(30) limit being included in the test for HCEs.

Thanks!

[Tom Poje]

my understanding you have an operational failure - a failure to follow the terms of the document, so it would be correctable under EPCRS - put the plan in a position as if the error hadn't occurred, so I don't believe you would include such amounts on the test. I don't think that is any different than if you hadn't stopped deferrals after a hardship withdrawal.

[pholosofizer]

Thanks Tom.

I figured that but couldn't find any examples after scouring the internet and EOB had no mention of it. Refunds would change a lot based on the response.