Ineligible participant makes deferrals--correct by distribution--Match?

[jkharvey]

If the employer decided to return the deferrals for ineligible participants and a match amount (SH Match) is involved, would it be permissible to use those match amounts to fund either future SH match or any receivable still due for SH Match?

I know that forfeitures may not be used to fund SH match, but these aren't true forfeitures in the sense that a participant was never vested in the amounts.

thank you

[Tom Poje]

arguably the contributions were 100% vested when made so they probably could be used be used anyway.

but as you indicated the person wasn't entitled to them anyway and you are merely correcting that problem

[BG5150]

This is a correction, not a forfeiture.

EPCRS says that excess amounts (plus earnings) must be held in a "suspense account," the proceeds of which must be used to offset any Employer contributions (except deferrals). And there can be no ER contributions (except deferrals) until that account is exhausted.