415 Excesses / EPCRS

[austin3515]

Plan has up to ~12% profit sharing (after integrating w/ SS) plus a 6% matching contribution.  As a result, after taking into account 401(k) contributions, a handful of participants each year will require a portion of their 401k refunded.

4.04 of EPCRS states:

 A plan that provides for elective deferrals and nonelective employer contributions that are not matching contributions is not treated as failing to have established practices and procedures to prevent the occurrence of a §  415(c) violation in the case of a plan under which excess annual additions under §  415(c) are regularly corrected by return of elective deferrals to the affected employee within 9½ months after the end of the plan's limitation year. 

So I'm ok with this policy, correct?

[Kevin C]

Provided the plan document allows it, yes.

In the section on 415 limits, our VS document says that if the plan is eligible for SCP, the employer may use reasonable correction methods to correct excess annual additions to the extent allowed under EPCRS.  The correction you want to use starts in the middle of 6.06(2).

[RatherBeGolfing]

My document says that the PA shall correct such excess pursuant to the procedures outlined under EPCRS. My guess is that most documents address it in some way