Erroneous 401(k) Distribution Collection

[Guest Shanna Patterson]

If a 401(k) plan's end of year testing was completed incorrectly, resulting in erroneous distributions being given back to the HCEs; what recourse does the plan administrator have?

According to the professionals at our 401(k)investment company, our employees have "no choice" and must pay back the monies. Well, this is easier said than done. Especially in the case of terminated employees.

Does anyone have experience with this? Or have a suggestion on how to persuade all the plan participants to pay back the money?

Any help would be greatly appreciated. Thank you.