ND testing - Catch up contributions

I recently started a new job as benefits manager.   Our record keeper (a public company) states that their testing department typically reclassifies regular (non CU ) contributions AS catch up contributions in order to help our test results.    this is new to me....anyone ever seen/ heard of this?   any comments greatly appreciated!

Standard procedure when necessary.

It is done in lieu of refunds. If the calculations support HCE A receiving an ADP refund of $4,000, but they have not used up their full catch-up limit for the year, the $4,000 is reclasssified as catch-up instead of being distributed to HCE A. 

What should NOT be done is reclassifying catch to all the HCEs at the beginning of the test. just because HCE B only deferred $5,000 and is over age 50, and 100% of their deferral would fit within the catch-up limit does NOT mean it should proactively be classified as catch-up to give them an ADP of 0% to help the test at the beginning. 

The reclassification to catch-up only only occurs in lieu of refunds. 

The ADP test is performed AFTER catch-ups are reclassified due to the 402(g) limit. So the scenario only applies to people who are age 50 or older and deferred less than the 402(g) limit + mac catch-up. 

Hope that helps. 

It's all good.  Tax treatment, deductions all are the same from your seat.  Relax.