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February 23, 2009

Excess aggregate contribution

Your Guide



With respect to any plan year, the excess of —

  • the aggregate amount of the matching contributions and employee contributions (and any qualified nonelective contribution or elective contribution taken into account in computing the contribution percentage) actually made on behalf of highly compensated employees for such plan year, over…
  • the maximum amount of such contributions permitted under the contribution percentage requirement (determined by reducing contributions made on behalf of highly compensated employees in order of their contribution percentages beginning with the highest of such percentages).

Referring Cite

IRC. §401(m)(6)(B); Treas. Reg. §1.401(m)-2

Additional Helpful Information

A plan may correct an excess aggregate contribution by either of the following methods:

    • Additional contributions. –The employer makes additional contributions that are taken into account for the ACP test , that in combination with the other contributions taken into account , allow the plan to satisfy the ACP test
    • Excess aggregate contributions distributed or forfeited. –Excess aggregate contributions are distributed or forfeited in accordance with the Code.

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