Safe Harbor Match miscalculated by payroll provider

[Pammie57]

A company started a safe harbor 401k for 2020.  They and their payroll provider misunderstood how the safe harbor match worked....They over-matched a participant who only deferred 1% - they gave him 4% so his match was way  more than his deferrals.   Should this be moved to the forfeiture account since it wasn't supposed to ever be given to this participant or can it be returned to the employer.  I have looked at their adoption agreement and don't really see a clear answer.   Thanks for any insights.

[Lou S.]

Forfeit and offset future match. That's what I'd do.

[Luke Bailey]

Pammie57, under ERISA a "mistake of fact" contribution can be withdrawn within one year of the date of contribution, and IRS must live with that. It is understood by practitioners that IRS has a very narrow view of "mistake of fact," like, "I didn't have my glasses on that day and it looked like there was a 0 after the 1," not "We misread the plan and did not know how this worked," which the IRS would call a "mistake in procedure."