I've encountered the following situation:

Plan year - 10/1/01 - 9/30/02

ADP test for the above plan year has failed.

Plan was amended to allow for catch-up contributions beginning 10/01/02.

Since the ADP test failed and one of the HCE's has room to recharacterize his refund to catch-up, can his refund be recharacterized even though catch-up was not allowed during the plan year? Or because during 2002 catch up contributions were available, even though not in the plan year, must his refund be recharacterized?

Any help would be appreciated.

I think it must be refunded, no catch up.

The only way to have catch up in this situation is if all participants had the opportunity to make catch up contributions on their own in that plan year. Given that the plan didn't allow it, doing it for this one person would not be allowed.