BLM Posted October 18, 2017 Share Posted October 18, 2017 Forfeitures at end of year = $99.13 (WOW!) Could be used for plan expenses or allocated as Match or PS. - (no QNEC allowed) Issues: 1) There are no plan expenses 2) Match: No prior match for ACP. Match allocation does not exclude HCEs therefore ACP would fail and HCE refund of <$6 would occur (fee for refund is $100). 3) PS: 2 participants who otherwise do not have accounts would each receive an allocation of $2 Any suggestions for how to otherwise dispose of the forfeitures? Link to comment Share on other sites More sharing options...
ESOP Guy Posted October 18, 2017 Share Posted October 18, 2017 I would look for some expenses. I believe a plan can pre-pay an expense for next year this year and use the forfeitures to pay. Can one of the service providers get you can invoice? If the sponsor normally pays the invoices I believe you can split the invoice between the plan and the sponsor. How do the expenses get paid otherwise? I have had plans with people who have $2 balances. It is a pain but it happens. Just curious does this plan have an issue of no recurring contributions? Typically you get such small forfeitures when there hasn't been a PS contribution for many years. Should the people you have forfeiting the small amount in fact be 100% vested because there hasn't been a contribution for a number of years? Link to comment Share on other sites More sharing options...
RatherBeGolfing Posted October 18, 2017 Share Posted October 18, 2017 22 minutes ago, ESOP Guy said: I would look for some expenses. I believe a plan can pre-pay an expense for next year this year and use the forfeitures to pay. That is what I would do. Just make sure it is invoiced AND paid in the year when the forfeitures must be used. Link to comment Share on other sites More sharing options...
Bird Posted October 18, 2017 Share Posted October 18, 2017 We regularly accrue these type of expenses and don't worry too much when they are physically removed from the account, although we try to do it in a timely manner. Accruing them effectively expenses them in the correct year, at least in theory. Never been called on it. Ed Snyder Link to comment Share on other sites More sharing options...
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