Hello all,
This is a first for me. The plan terminated and assets have been liquidated from record keeper. The plan failed ADP/ACP testing with two participants requiring employer match funds to be returned to the plan. My understanding is once the two participants transfer the employer match funds back into the forfeiture account (via rollover from participant's IRA), those funds will get evenly distributed amongst participants who had balances as of the date of the plan termination. Is this correct?
Alternatively, what would happen if the plan decides to do nothing? What penalties will incur? The employer funds only total $900 and if distributed amongst participants, the participants would receive very low amounts.
Any insight would be helpful!
