ALLOCATING EXCESS CONTRIBUTIONS definition
ALLOCATING EXCESS CONTRIBUTIONS. The Administrative Committee shall allocate the total amount of Excess Contributions determined in Step 1 first to the Highly Compensated Employee(s) who had the highest dollar amount of Employer contributions (for the year in which the Excess arose) actually taken into account in computing the Actual Deferral Percentage test in Section 4.5[f], by reducing the amount of such contributions until either [a] the amount of the reduction equals the total Excess Contributions determined under Step 1, or [b] the remaining contributions of the first Highly Compensated Employee equals the contributions of the Highly Compensated Employee(s) with the next highest dollar amount of such contributions and continuing in descending order until all Excess Contributions have been allocated. If Excess Contributions are allocated in accordance with the preceding provisions (and distributed according to Step 3), the Actual Deferral Percentage of Section 4.5[f] is deemed to satisfy the nondiscrimination test of Code Section 401(k)(3), regardless of whether the Actual Deferral Percentage, if recalculated after such allocation and distribution, would satisfy Code Section 401(k)(3). [C] STEP 3 -DISTRIBUTING ALLOCATED EXCESS CONTRIBUTIONS: IF any Excess Contributions, allocated according to Step 2, must be distributed, such allocated Excess Contributions, adjusted for any income and any loss attributable thereto, shall be returned to the Participants no later than the last day of the following Plan Year. At the discretion of the Employer, income and losses attributable to Excess Contributions allocated to Participants may be calculated using any reasonable method, provided that the method does not violate Code Section 401(a)(4), is used consistently for all Participants and for all corrective distributions under the Plan for the Plan Year, and is used for allocating income to Participant's Accounts. Alternatively, income and losses attributable to Excess Contributions allocated to Participants can be calculated as the sum of [i] the income or loss for the Plan Year allocable to the Participant's Elective Deferral account (and, if applicable, the Qualified Non-elective Contribution account or the Qualified Matching Contribution account, or both) multiplied by a fraction, the numerator of which is the Participant's Excess Contributions for the Plan Year and the denominator of which is the Participant's Account balance attributable to Elective Deferrals (and Qualified Non-elective Con...