Distribution Error - Vesting

[Vlad401k]

In 2020, a participant took a distribution and it was thought that she was 20% vested. However, in 2021 it was discovered that she should have actually been 40% vested. We've contacted the participant and she wants to do a distribution for the portion that incorrectly vested. I've done some research and it looks like the incorrectly forfeited amount must be adjusted for earnings (https://www.irs.gov/retirement-plans/plan-sponsor/fixing-common-plan-mistakes-vesting-errors-in-defined-contribution-plans).

 

My question is how to determine the earnings on the incorrectly forfeited amount, since the participant's balance was $0 after the distribution was taken?

 

Thanks!

[Bill Presson]

Generally you would look at the fund(s) the money was previously invested in.