Forfeited checks

[PS]

Hi, 

one of the terminating plan have 5-6 participants who had forfeited the checks, the money was moved into the forfeiture account which was used to pay an invoice.  Since we are working with the DOL and the forfeited check needs to be re-issued and considering the fact that the balance in the forfeiture is less by $100 can we re-issue on a pro-rata base and also will this needs to be reported on the 1099-R?

Thanks

[hr for me]

Why and how did they "forfeited the checks"?  Your question isn't very clear.  Why are you working with the DOL? Is this an audit?

I would think the employer would have to make the forfeiture account whole and repay the amounts through the plan to those 5-6 participants.  why do you think that you don't have to reissue the whole original amount?

[PS]

6 minutes ago, hr for me said:

Why and how did they "forfeited the checks"?  Your question isn't very clear.  Why are you working with the DOL? Is this an audit?

I would think the employer would have to make the forfeiture account whole and repay the amounts through the plan to those 5-6 participants.  why do you think that you don't have to reissue the whole original amount?

This was a lump sum distribution and its an abandoned plan.  Participants are reaching out and we don't have a sponsor to fund.  

[Peter Gulia]

PS, if you are a nonfiduciary service provider taking instructions from the plan’s administrator or trustee (which might be a qualified termination administrator, court-appointed fiduciary, or other successor fiduciary), you ask the fiduciary for its instructions.

If you are the fiduciary, you face decisions about the plan’s accounting and final distributions.

[PS]

7 minutes ago, Peter Gulia said:

PS, if you are a nonfiduciary service provider taking instructions from the plan’s administrator or trustee (which might be a qualified termination administrator, court-appointed fiduciary, or other successor fiduciary), you ask the fiduciary for its instructions.

If you are the fiduciary, you face decisions about the plan’s accounting and final distributions.

The will be given on a pro-rata base however does ERISA state how this should be reported on 1099-R?

 

[Bri]

I'm mildly curious as to who authorized the payment of the plan expense from the forfeiture account, acknowledging it may have already been built into the service contract for the recordkeeper.

[PS]

19 hours ago, Bri said:

I'm mildly curious as to who authorized the payment of the plan expense from the forfeiture account, acknowledging it may have already been built into the service contract for the recordkeeper.

we received the plan for termination in 2019 and the balance in the forfeiture was used sometime in 2017, my guess is the sponsor.  Since the amount will be given on apro-rata base I'm wondering how can this be reported on the part's 1099-R.