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Plan Sponsor Reimbursement from Forfeiture Account

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If a plan sponsor has already paid the CPA for their 401K Plan audit, can the plan reimburse the plan sponsor for those costs from the forfeiture account?

Or must the fees be paid from the plan's forfeiture account directly to the CPA firm that audited the plan.

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I have a similar question but with regard to TPA fees and for how far back may the reimbursement be reasonably made?

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I say no and I think this thread confirms it.

But, there is nothing preventing the plan from paying the CPA (or TPA) and said recipient then refunding the overpayment(s) to the employer.  I'm not sure I'd go back more than a few months on that though.

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3 hours ago, Bird said:

I say no and I think this thread confirms it.

But, there is nothing preventing the plan from paying the CPA (or TPA) and said recipient then refunding the overpayment(s) to the employer.  I'm not sure I'd go back more than a few months on that though.

I have always suggested this course of action in order to avoid even the appearance of a reversion. 

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8 hours ago, Bird said:

I say no and I think this thread confirms it.

But, there is nothing preventing the plan from paying the CPA (or TPA) and said recipient then refunding the overpayment(s) to the employer.  I'm not sure I'd go back more than a few months on that though.

 

5 hours ago, JackS said:

I have always suggested this course of action in order to avoid even the appearance of a reversion. 

Isn't this just a way to get the plan to refund the forfeitures to the company without any "appearance of a reversion".  That is, the pattern (and maybe timing) of the transactions are effectively a reversion to the company.  Also, doesn't the forfeitures in the plan actually "belong" to the participants in the plan... whether to pay reasonable/legitimate fees, reallocating to them, or reducing employer contributions.  So second thought, why not have the employer reduce his next contribution by the remaining forfeitures...

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13 hours ago, chc93 said:

Isn't this just a way to get the plan to refund the forfeitures to the company without any "appearance of a reversion".

Yes.  That was the point.

14 hours ago, chc93 said:

So second thought, why not have the employer reduce his next contribution by the remaining forfeitures...

This usually comes up because/when the employer doesn't want to make a contribution.

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Thanks for the discussion! I read that other thread too and I wonder what got deleted from there.

We talked about it here and came up with something similar to what Bird said above. Glad to see that others agree!

 

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You can use forfeitures for audit fees, advisor fees, and other plan related fees IF the plan document has this written in it. 

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