ADP Corrective Distributions and Top Heavy Balances

[justatester]

Question:

For the purpose of calculating the top heavy balances, are adp/acp corrective distributions added back in? 

Plan failed 2024 ADP/ACP testing:  HCE/Key employees adp/acp corrective distributions of $5,000.  These were corrected on 3/1/2025.  When looking to add back in "In-Service" distributions, would these be considered that for top heavy balance for the 2025 determination?  Or excluded from the Top Heavy balance. 

My argument is that these distributions were forced distributions because of the failing ADP/ACP test.  The participant did not have the option not to take it, so why should it be added back in?

Thoughts?

[Bri]

According to the ERISA Outline Book, the IRS took the position at a conference that you count ADP/ACP, but had no opinion on 402g excess.  (The book's discussion also suggested you wouldn't count 415 excess distributions, since those were never proper annual additions to begin with.)