Reversing a corrective distribution made in error

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scarabrad
Posts: 7
Joined: Wed Oct 01, 2014 6:34 am

Reversing a corrective distribution made in error

Post by scarabrad » Wed Apr 04, 2018 4:41 am

Hi folks,

Need some help from the experts (SpiritRider, any thoughts?). I've posted this elsewhere, with limited response.

I had two employers last year in 2017 and mistakingly overcontributed around $5200 in employee contributions across two distinct unrelated 401k plans. My second employer originally told me that I could not remove the excess from their unmatched account, so I removed it from my previous employer’s 401k. In doing so, I lost out on an identical match from my old employer.

My current employer now tells me that I may, in fact, be able to remove the excess from my unmatched 401k retirement plan.

Is there any way to reverse a distribution of excess contributions from my previous employer? The distribution to me occurred about a week ago and I still have not cashed the check. Is this an allowable transaction? If so, I’d like to undo it and take the funds from my current employer’s unmatched plan.

Thoughts?

Thanks in advance.

SR

ryman554
Posts: 1108
Joined: Sun Jan 12, 2014 9:44 pm

Re: Reversing a corrective distribution made in error

Post by ryman554 » Wed Apr 04, 2018 8:51 am

There may or may not be. Likely not.

Whatever the case, I can confidently tell you that you will be spending more than your ex-company match you have lost as valued in time and aggravation trying to get the two companies to do what you want.

You are in compliance in IRA regulations now. Just go forward.

Spirit Rider
Posts: 8933
Joined: Fri Mar 02, 2007 2:39 pm

Re: Reversing a corrective distribution made in error

Post by Spirit Rider » Wed Apr 04, 2018 9:13 am

I have no idea if IRS regulations would prohibit this. The return of excess employee elective contributions are at the option of the plan. I can't imagine there would be any requirement that they have to comply with this request. Your only choice is to call the plan and ask.

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