402g limit corrected same year deferred

[Mr Bagwell]

A NHCE participant was proactive for 2017 and realized his deferrals into two unrelated plans were over the 402g limit and requested a distribution of the excess.  The distribution was done from the currently employed plan that we administrate.

From the 401k Plan Fix It Guide:  Excess deferrals distributed to highly compensated employees are included in the Actual Deferral Percentage (ADP) test in the year the amounts were deferred. Excess deferrals distributed to nonhighly compensated employees aren't included in the ADP test if all deferrals were made with one employer.  (Emphasis mine)

Just so I am doing this correctly, the overage stays in the ADP total for the year because of the unrelated plans?  I guess that makes sense... the employee could manipulate the two unrelated plans if they were devious.

[Tom Poje]

actually neither plan accepted amounts over the limit, so it is not a plan issue so all amounts are included even if it is an NHCE

it is strictly an individual limit in this situation..

[Mr Bagwell]

Thanks, Tom.

That's a much more precise answer than my ramblings.