Correcting Failure to Follow Plan Terms Error By Transferring to Non-Q

[Guest smithee]

I have the following situation. Company sponsors 401(k) plan and mirror 401(k) plan. Mirror plan takes deferrals and matching contributions limited by 415 and 401(a)(17) - extra monies are automatically credited to nonqualified plan. Company discovers after end of qualified plan year that it made administrative error and did not properly limit 401(a)(17) contributions for year. This causes excess deferrals (pursuant to terms of qualified plan) and excess matching contributions in qualified plan. Company wants to transfer monies (plus earnings) to their proper place as credited in non-qualified plan (where monies would have been if error had not occurred). Third-party administrator claims PLRs state that must return monies to employee. However, I cannot find the alleged PLRs and believe they dealt with situations where ADP and ACP tests were violated which is not the case here -- it is a failure to follow plan terms. Is there a problem with distributing money out to credits in non-qualified plan (plus earnings). I feel this is equivalent to PLRs dealing with situation where monies are originally put in non-qualified plan and then post plan year transferred to qualified plan (without earnings). Any thoughts would be much appreciated.