Spillover Method Clause Samples
The Spillover Method clause defines how excess amounts, benefits, or obligations that exceed a specified limit are handled within an agreement. Typically, this clause outlines that any surplus beyond a set cap will be allocated, distributed, or managed according to predetermined rules, such as rolling over to another period, transferring to another party, or being forfeited. Its core practical function is to ensure clarity and fairness in situations where contractual thresholds are exceeded, thereby preventing disputes over how to handle excesses.
Spillover Method. (1) Any nondeductible Employee Voluntary, Required Voluntary Contributions and unmatched Elective Deferrals to the extent they would reduce the Excess Amount will be returned to the Participant. To the extent necessary to reduce the Excess Amount, non-Highly Compensated Employees will have all Elective Deferrals returned whether or not there was a corresponding match.
(2) Any Excess Amount which would be allocated to the account of an individual Participant under the Plan's allocation formula will be reallocated to other Participants in the same manner as other Employer contributions. No such reallocation shall be made to the extent that it will result in an Excess Amount being created in such Participant's own account.
(3) To the extent that amounts cannot be reallocated under (1) above, the suspense account provisions of (a) above will apply.
Spillover Method. (1) Any Elective Deferrals and nondeductible Employee Voluntary Contributions, to the extent they would reduce the Excess Amount, will be returned to the Participant.
(2) Any Excess Amount which would be allocated to the account of an individual Participant under the Plan's allocation formula will be reallocated to other Participants in the same manner as other Employer contributions. No such reallocation shall be made to the extent that it will result in an Excess Amount being created in such Participant's own account.
(3) To the extent that amounts cannot be reallocated under (1) above, the suspense account provisions of (a) above will apply.
Spillover Method. (1) Any Excess Amount which would be allocated to the account of an individual Participant under the Plan's allocation formula will be reallocated to other Participants in the same manner as other Employer contributions. No such reallocation shall be made to the extent that it will result in an Excess Amount being created in such Participant's own account.
(2) To the extent that amounts cannot be reallocated under (1) above, the suspense account provisions of (a) above will apply.