Part III. Administrative, Procedural, and Miscellaneous

ution of excess contributions with an equivalent corrective contribution that typically will be less than the corrective contribution under the SVP correction method for the same failure;

• If eligible employees have been excluded from receiving employer contributions under a profit-sharing or stock bonus plan, then, in addition to the SVP correction method, improperly allocated contributions can be reallocated to the excluded eligible employees, in accordance with specified requirements;

• If an amount has been improperly forfeited under a defined contribution plan, then either a corrective contribution can be made or, in accordance with specified requirements, the improperly forfeited amount can be reallocated;

• If payments from a defined benefit plan exceeded the § 415(b) limits, the excess can be repaid to the plan or future payments can be reduced;

• If annual additions under a defined contribution plan exceeded the § 415(c) limits, then in addition to the SVP correction method, the previously paid excess can be repaid to the plan or, in the case of certain terminated employees who have received a distribution of elective deferrals, nonvested employer contributions can be forfeited;

• If amounts in excess of certain other limits have been paid, then the excesses can be repaid to the plan or, as an additional alternative in the case of a defined benefit plan, future benefit payments can be reduced;

• If contributions to a defined contribution plan have been allocated based on compensation in excess of the § 401(a)(17) limit, then the excess allocation can be reallocated to other participants or used to reduce future employer contributions or, as an additional alternative, under the Walk-in Closing Agreement Program (“Walk-in CAP”), additional plan contributions can be made for other employees;

• If hardship distributions that were not permitted under plan terms have been made, then, in accordance with specified requirements, a corrective plan

26 CFR 601.202: Closing Agreements.

Rev. Proc. 99–31

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