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IMHO, this is an operational error (failure to follow the plan document) and the sponsor should investigate correction through EPCRS or risks plan disqualification. Sounds like it may not be eligible for self-correction because of how long this error occurred. It would be corrected by reallocating all forfeitures in the plan’s forfeiture suspense account to any participants who should have received them had the forfeitures been allocated on a timely basis. In VCP, the plan sponsor could also ask for correction through a PS allocation to current employees.

Be careful about recent forfeitures. If the people whose account is being forfeited terminated employment within 5 years of the termination date, the IRS can take the position that they should be vested. Certainly if they terminated within 12 months of the termination, there is a vesting issue. If they haven't missed a forfeiture use date, so that the forfeitures are recent, then it makes me think that there's a problem here ...

Ilene wrote what she wrote before the update to epcrs. She implies strongly that since the requirement to benefit everybody has been eliminated it very well may be possible to retroactively adopt as an 11g amendment or as an SCP amendment. I didn't check the effective date of the change. That might change things.

Ms Ilene addressed this earlier this year.

No one mentioned having everyone in their own group. Hence my use of the word "potential." But please tell me what I'm missing - I'm sure there is something - if no one is getting allocation of zero, why would you be using the ABT to pass coverage testing anyway? I'm missing some key point here, I'm sure. Thanks.

Who mentioned having anybody in their own group? But let's assume that's the case. He would only fail to be able to use the ABT if somebody was excluded by getting an allocation of zero?

And if you do end up using the ABT, remember that it can be calculated using cross testing.

YES - all service within the control group must count for eligibility and vesting whether earned at a participating employer or not.

4th Circuit just ruled on that -- see https://benefitslink.com/news/index.cgi/view/20210811-166919

Yes. At least IMHO. See DOL 2530.210(d).

Also, don't forget that the statutory maximum is increased to 1 million if the plan holds employer securities.

Also keep in mind that timing of distributions is a protected benefit, so for existing participants you can't change it from, say, immediate to a One Year Break.

Belgarath, in similar situations we have figured that since there is no trust that needs to be "qualified" and no language and history such as under 401(a) that says that a qualified plan is a (and is only) a plan that meets all the requirements of 401(a), the only reasonable response to this situation under 125 is to adopt a new, current document to replace the old (which, frankly, sometimes cannot even be found), and move on. I have never had the IRS ask for old documents in an exam (honestly, I have never had a client examined for 125, or if this was included in the document request by the agent, it was just checked off for existing), but in the context of corporate acquisitions where we have represented target company usually sophisticate buyer's counsel will accept the replacement document, albeit that they get indemnification, either specifically or generally. So I think the standard of practice is to replace with new and move on.