Over Match

[Safeharbor29]

I have a scenario where I have a safe harbor match of 100% of 4% and for 2012-2014 they didn't have a cap on the match at the annual compensation limit, so some received thousands more in match because their gross income was over $250,000.

How do I get participants to return funds if they have already taken distributions? Are there any correction methods for this?

[Kevin C]

The "pre-approved" correction methods are in Rev. Proc. 2013-12 as modified by Rev. Proc. 2015-27. Other correction methods may also be appropriate, but would need to be justified if the IRS looks at it. This link will take you to a page with links to both Rev. Procs. You will want to focus on the correction methods for overpayments.

http://www.irs.gov/Retirement-Plans/New-Rev-Proc-Updates-EPCRS

You will also want to read the sections on eligibility for SCP and VCP to determine which program the correction fits under. With multiple years involved, you may not qualify for SCP. Also, keep in mind that if the IRS decides your failure is egregious, they can ask for a higher filing fee under VCP.