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Greetings, hbisafool, and welcome.

<<My husband made the maximum contribution to his plan, then about a year later got a refund of $1200--something to do with a top-heavy plan and highly compensated employees. Does anyone understand these limitations?>>

Your husband, as part of what's called the "highly compensated employee" group (HCE), is limited in the percentage of pay he is allowed to contribute to his retirement plan by the contributions of the "lower compensated employee" group (LCE). Each year, plans must undergo discrimination testing that measures the average percentage of pay contributed by both groups. As a group, the HCE may contribute no more than 2% above the percentage contributed by the LCE. As an example, if as a group the LCE contribute an average of 3% of pay, then the HCE may contribute no more than an average of 5%. If the HCE contributed more than that, then the excess contributions by law must be refunded.

Discrimination testing of your husband's plan obviously showed the HCE put in more than legally allowed, so the excess money has been returned to you.

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