overfunded match contributions

[pmacduff]

Small 401(k) plan with 13 participants. match formula in plan doc is 50% up to 4%.  match was set up in payroll incorrectly for some participants who received 100% up to 2%.  owner is asking if he can leave the excess match in the participant accounts for those who received too much.   (There were 2 participants shorted match that are going to be trued up and 4 that were matched properly.  7 received excess match.  all participants who received excess match are NHCEs.)

Thoughts?

[401king]

The Plan Doc will clarify but typically a match must be uniform for all participants. May be able to reallocate it as profit sharing, though. 

[Lou S.]

If they were all NHCEs you can probably self correct by retroactive amendment to conform the document to the actual match contributed for the Plan year if they all got more than the match formula even if it's not uniform since with will clearly be non discriminatory if the extra natch only when to NHCEs.