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Originally posted in 457b forum but so far no responses so I thought I would try it here:

Participant in a non-governmental 457(b) plan incurred a severance from employment and elected to defer distribution of his account (as allowed under the plan document).  The participant was subsequently rehired a few weeks later and continued his participation in the plan.  When the deferred distribution date arrived (2 years later) the recordkeeper failed to segregate the participant's contributions (based on first period of employment and second period of employment) and distributed his entire account, including deferrals made after he was rehired.  Participant is still employed.  Was the participant entitled to receive the distribution of his account attributable to deferrals in his first period of employment (because he did have a severance from employment and elected a deferred distribution date)?  If so, can we treat the distribution of the deferrals made during his subsequent re-employment as an "overpayment" and apply the correction method for overpayments in EPCRS to correct (knowing that 457(b) plans are not included in EPCRS)?  Any thoughts?

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