Excess match due to failed ADP Test

Plan uses compensation, excluding taxable fringe benefits, as the definition of compensation for plan purposes (eligible for deferrals, match and PS).  NOTE: Catch-up contributions are not eligible for match.

Participant A’s gross compensation is 160,000 and comp less fringe benefits is 150,000.

We are running the ADP test using gross compensation as it provides better results.  The issue is the plan is failing the ADP test and refunds are needed. The  ACP test passes. 

Participant A is having refunded to him $5,000.  Remaining deferrals are $11,500 which yield an effective deferral rate of 7.67% (using remaining 11,500 deferral divided by plan definition of compensation for deferral purposes of $150,000).

Match is calculated as 50% of first 5% of deferrals and 10% of next 5% of deferrals.

Participant A initially received match of $4,500.  Even though the ACP test did not fail, I believe that match needs to be forfeited since his effective rate of deferrals has changed.  I calculate the amount of match that needs to be forfeited as $349.50.

Is my reasoning correct?

Now we have Participant B.  Participant B is not required to receive a refund as $1000 has been reclassified as catch-up.  Because some of her deferral has been reclassified, is she now required to forfeit the match associated with these funds since catch-up is not eligible for match?

if catch-ups were matched then no rate of match problem: (emphasis not mine except the italicized, I copied and pasted and couldn't change the font color)

(4)Availability of catch-up contributions. An applicable employer plan does not violate § 1.401(a)(4)-4 merely because the group of employees for whom catch-up contributions are currently available (i.e., the catch-up eligible participants) is not a group of employees that would satisfy section 410(b) (without regard to § 1.410(b)-5). In addition, a catch-up eligible participant is not treated as having a right to a different rate of allocation of matching contributions merely because an otherwise nondiscriminatory schedule of matching rates is applied to elective deferrals that include catch-up contributions. The rules in this paragraph (d)(4) also apply for purposes of satisfying the requirements of section 403(b)(12).. [Treas. Reg. § 1.414(v)-1(d)(4)]

so I think by inference if catch up are not matched you have to forfeit the related match, otherwise it makes little sense for this reg