post year contribution correction

[WCC]

Participant provides a valid and timely deferral change form to HR. Deferral form says "I want to defer 100% of eligible income on the December 31, 2016 payroll" HR does not process the request. Participant is upset and plan sponsor wants to fix the problem. We can follow Rev Proc 2015-28, but are there any other possibilities?

The payroll funds are sitting in the employee's checking account. What would happen from a compliance point of view if the plan sponsor retrieves the funds and corrects the December 31, 2016 payroll and withholds 100%? 

Thank you

[Bird]

Quote

The payroll funds are sitting in the employee's checking account. What would happen from a compliance point of view if the plan sponsor retrieves the funds and corrects the December 31, 2016 payroll and withholds 100%? 

If payroll can be re-run why not do it?  I don't even see it as a plan issue.