402g limit exceeded

[J Simmons]

High earner under age 50 works for two employers. For 2023, he electively deferred $22,500 into one employer's 401k plan as Roth. In the other, he electively deferred $7,500 as tax deferred. He will have to have $7500 returned to him. Is there any ordering of such, i.e., Roth before tax deferred or tax deferred before Roth, that must be followed or can he choose whichever?

[Belgarath]

I don't think the Code/Regs require any specific ordering. But the Plan may. Our docs specify that the distribution shall be made from the pre-tax or Roth account, as "operationally determined by the Administrator."  But the distribution must be made first from unmatched deferrals, regardless of whether they are attributable to pre-tax or Roth.

[Lou S.]

If it's two employers, it's which ever one he requests the 402(g) refund from.

if that Plan had some of both, then it's whatever the Administrative procedures say. Though in this case the employee has to actively request a refund since neither plan is expected to know about the other (assuming no GC/ASG) there really isn't any reason not to give the employee the choice.