pmacduff Posted June 8, 2017 Share Posted June 8, 2017 ok so the client isn't going to make any profit share for the plan year. there are forfeitures to be reallocated. Most vendors (even some of the largest in the 401k arena) don't have an easy mechanism for the forfeiture reallocation process. Yes - they allow a "contribution" and then fund it with forfetiures but then it shows on the annual reports as a contribution and not as a forfeiture reallocation. Why does this seem to be so difficult...?! I understand that the forfeiture reallocation is a contribution of sorts, but since it isn't deductible again I would like it to show as a forfeiture reallocation and NOT as a contribution. mostly just venting but was wondering what others thoughts are on this. Link to comment Share on other sites More sharing options...
Bird Posted June 9, 2017 Share Posted June 9, 2017 Mmmm, of all the complaints I have about vendors, that's one I've never had. (Just musing.) I think in any scenario where forfeitures reduce an employer contribution the total allocation is going to show up as a contribution, no? (So the "contribution" is really an "allocation" and the deduction doesn't equal the total allocated.) Is this really any different? Ed Snyder Link to comment Share on other sites More sharing options...
401king Posted June 29, 2017 Share Posted June 29, 2017 I wouldn't get too hung up on the reports, but we do make sure that the Form 5500 correctly matches the company's deductible contribution amount (i.e. does not include forfeiture allocations). R. Alexander Link to comment Share on other sites More sharing options...
K2retire Posted June 30, 2017 Share Posted June 30, 2017 It is a contribution in the sense that it must be included in the participants' 415 limit for the year. Link to comment Share on other sites More sharing options...
RatherBeGolfing Posted June 30, 2017 Share Posted June 30, 2017 On 6/8/2017 at 3:10 PM, pmacduff said: ok so the client isn't going to make any profit share for the plan year. there are forfeitures to be reallocated. Most vendors (even some of the largest in the 401k arena) don't have an easy mechanism for the forfeiture reallocation process. Yes - they allow a "contribution" and then fund it with forfetiures but then it shows on the annual reports as a contribution and not as a forfeiture reallocation. Why does this seem to be so difficult...?! I understand that the forfeiture reallocation is a contribution of sorts, but since it isn't deductible again I would like it to show as a forfeiture reallocation and NOT as a contribution. mostly just venting but was wondering what others thoughts are on this. What vendor are you using? Link to comment Share on other sites More sharing options...
pmacduff Posted July 17, 2017 Author Share Posted July 17, 2017 This particular one was for American Funds Premier. AND AF charged the client $100 because they said it could only be done manually. There are other vendors that don't charge (for example Empower) but still have to do it "manually" where I send them in a spreadsheet and they do the forfeiture reallocation from that. Link to comment Share on other sites More sharing options...
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