Unless you delegate a fiduciary function to a plan fiduciary such as an ERISA 3(16) and 3(38)fiduciary, it’s your call on things. When a third-party administrator (TPA) decides on their own that you will refund deferrals because of a failed Actual Deferral Percentage Test instead of giving you the option of a safe harbor non-elective contribution or a qualified non-elective contribution, that’s a problem. The problem is that it’s your call and the TPA did something that might get them labeled a plan fiduciary.

It’s important to read the contract as to who the fiduciary is under the plan, as well as make sure that plan providers don’t make choices on their own that belong to you.