Is there anything that says a participant must forfeit there distributable benefit because they were involved in a criminal act against the employer??

No, and section 401(a)(13) generally provides that the person must get their qualified plan benefits.

Right! "Bad Boy" clauses went out when ERISA came in!

I agree, and here is a quick story to confirm. Participant is in jail, convicted of a felony. The attorney of the harmed party had the participant's distribution check delivered to the jail, made out in the name of the participant, so that it could be signed over to the attorney to cover damages in the suit that had been filed.

Not so fast! According to the 1999 Pension Answer Book, Question 9:19 says that some courts have ruled that forfeitures can result from amounts greater than that which would result from the minimum vesting standards. According to IRS, vested benefits in excess of benefits required to be nonforfeitable under the statutory alternatives (7 year graded or 5 year cliff) may be forfeited due to employee misconduct or dishonesty. The book gives an example where an employee was partially vested under the plan's vesting schedule but did not have 5 years of service. Since the plan could have had 5 year cliff vesting, the employee's benefits were forfeitable. However, the retirement plan must provide the specific criteria for application of the bad boy clause, and its use cannot be discriminatory in operation.

Don't forget 401(a)(13)© which provides that offsets of benefits may be made against an amount that the participant is ordered to pay the plan by an order arising under a judgment of conviction for a crime involving such plan.

I have seen several instances where the employee was murdered by the spouse. Court ordered the spousal survivor benefit to be paid elsewhere, such as the guardian of the minor children, or other relative of the deceased if there were no children.

Chester's point is just a modification to the vesting schedule for certain acts rather than a bad boy clause per se. If, as most, the plan does not provide this, I don't see how you can do it if the crime is unrelated to the plan.