If a plan is classified as an EACA plan, how many months does the plan have to refund excess contributions?

When a plan is designated as an Eligible Automatic Contribution Arrangement (EACA), it is essential to understand the specific compliance requirements that govern it. One critical aspect involves handling excess contributions made to the plan. The law provides a specific time frame for the plan sponsor to refund excess contributions, ensuring that participants do not exceed contribution limits for specific tax years.

For EACA plans, the regulations stipulate that any excess contributions must be refunded within a six-month period from the end of the plan year in which they occurred. This timeframe allows for necessary adjustments to be made, ensuring that the plan remains compliant with the IRS contribution limits, thus fulfilling both regulatory and participant needs.

This six-month window is designed to provide a balance between compliance with IRS limits and the flexibility needed by plan sponsors and participants. Therefore, a plan classified as an EACA indeed has six months to refund excess contributions, making this the correct answer.