austin3515

I think it does more than imply that it is optional, I think it is the definition of optional. Thank you thank you thank you.

The question is, as fees were incurred during the year, should they have been paid from the forfeiture account. I just found a very relevant section in the Basic Plan Doicument Section 7.04©(2). (2) Allocation of Plan expense. As to any and all nonsettlor reasonable Plan expenses, including Vendor fees, which the Employer determines that the Plan will pay, the Plan Administrator has discretion: (i) to determine the method of allocating reasonable Plan expenses that are charged to the Plan as a whole; (ii) to determine which reasonable Plan expenses the Plan will charge to an individual Participant's Account; and (iii) to adopt an expense policy regarding the foregoing. The Plan Administrator must exercise its discretion under this Section 7.04©(2) in a reasonable, uniform and nondiscriminatory manner. The Plan Administrator will direct the Vendor to pay from the Funding Vehicle or to charge to the overall Plan or to particular Participant Accounts the expenses under this Section 7.04©(2) in accordance with the Plan Administrator's election of expense charging method or policy.

Wouldn't most if your clients prefer to use them to reduce their out of pocket expenses like a match? How about those with clients at John Hancock? I don't think JH will go into the forfeiture account first for their charge.

The sponsor can pay them, because the forfeitures are used to pay expenses paid by the Plan. Bill, are you of the opinion that plans are set up to pull RK charges from forfeitures before pulling from participant accounts. I have honestly just never seen that done, but most plan documents check the "use forfeitures for plan expenses" box.

Now that I like...

I submitted this to Corbel, and they responded that you could suggest that only unpaid expenses must come from forfeitures. Perhaps it was a convenient interpretaion (which I am going with due to necessity) because I think you would agree that this is just not done pretty much across the board. As I have said to others, I have NEVER seen a record-keeping platform set up to deplete forfeitures first before running their normal expense charging process (i.e., prorata allocation of the expense, selling funds to raise cash, etc). If anyone has a different take on what takes place in the "real world" please let me know.

It Does but rk fees are paid by the plan. Ie, because sponsor didn't pay them should they come from the forfeiture account?

But i could see an auditor saying you should have used forfeitures pay the rk expenses. Right?

They had the same interpretation (I submitted to Corbel and here at the same time). I too though was left longing for that sentence in the Basic Plan Document that made this clear-cut. Their interpretation seemed to be focusesd on the fact that forfeitures could/should be used towards unpaid expenses. Because the recordkeeping was paid when charged/incurred, you did not have to use forfeitures first.

403b prototype document from Corbel, use of forfeitures question: "Plan Expenses. Pay reasonable Plan expenses first (See Section 7.04©), then allocate in the manner described above." If this option is selected for match and nonelective, then must forfeitures be used first to pay recordkeeping expenses? In the plan in question, the recordkeeping expenses are paid by selling shares in mutual funds (i.e., not by plan sponsor and not by revenue sharing).

Corbel 401k prototype document. "Plan Expenses. May Forfeitures first be used to pay any administrative expenses?" If the answer is yes, must forfeitures be used to first pay recordkeeping expenses, asssuming the expenses are paid by selling shares (i.e., not revenue sharing, not paid by the plan sponosr)?

Thanks!

Thank you Pension Pro, but the question is, has a benefit accrued in my example?

What it must be like to be "Tom" on a public message board, and we all know who you mean

We will restate it to a non-standardized plan, of course.

PS Plan which indicates no allocation requirements for actives, but a 500 hour requirement for terms. The client wants to add a straight last day rule. When must this be amended to avoid a cut-back? I think that as long as no one has worked 500 hours it would be OK. I see it like a "modified last day rule." IF it was a regular last day rule, we all agree the plan could be amended now to change the allocations. So if no one has worked 500 hours, and no one has worked on the last day, then no one has accrued a right to the allocation yet. Thoughts?

http://www.plansponsor.com/401k_Participant_at_Fault_in_Account_Withdrawal_Dispute.aspx Write-up of that case. Thanks PensionPro!

Platofmr vendors, I am told, will mail address change confirmations to the old address when someone changes and address over the phone as a pretty neat safe-guard. A lot of times the issue with using the plan sponsor is that the plan sponsor may have lost touch with the participant and have no way of verifying the address. The notary option comes in handy in this instance.

So you're saying that this does happen regularly inside 401k plans? Are there any articles, etc that discuss this?

I think the most realistic example I can come up with is a disgruntled spouse/former spouse doing it, but I think anything is possible. Rigby, are you saying imposters often call, or that participants often call you directly for address changes? I don't think I've actually ever heard of an incident

Well, sure, my concern is that an imposter might impersonate a participant in order to obtain access to their life savings.

We work with some platforms where we are responsible for providing new addresses. A lot of platforms will take direction from us when addresses change. Other examples are pooled accounts and FBO accounts (we're talking about participants who perhaps terminated years ago and have moved a few times).

What are you doing to validate when a participant calls up to change their address? We have been either a) getting verificatiojn from plan sponsor, or b) completed address change form, notarized.

Plan does not allow for loans anymore (it used to). Can the plan allow for refinancings of existing loans?

This is an outstanding response, thank you!!