michael519

In a profit sharing plan that had reallocated forfeitures, three of the participants were allocated one cent in forfeitures. Does anyone have experience making a check payable to the participant for one cent? I see another participant has a balance of thirteen cents and while it is small, that isn't as bad as one cent. The small reallocation came from a relatively new participant who received their share of reallocated forfeitures, was not fully vested, and then terminated their employment, thus creating a forfeiture of that small amount. We are lucky there was no loss in the plan or their one cent could have dropped lower.

Thank you gentlemen. That is ultimately what the firm decided, to wait until the next eligibility entry period. (I apologize for the late reply. I never received a notification that my post was responded to.)

A law firm with one owner currently has a 401(k) with a service eligibility requirement of the next entry date following three months of service, with the entry dates being January 1 and July 1. The law firm will be bringing in two partners who have not been employed before by the law firm, but will become partners immediately. The firm is interested in allowing these two partners to participate in the 401(k) plan immediately, or at least the beginning of the calendar quarter following their employment. It would require a plan amendment and they don't want this change to apply to non partner employees. There is a chance that employees who had worked for the new partners in another law firm could also become employees in this existing law firm who would not be partners, so it opens up a can of worms. The 401(k) plan has no match, so other than administrative fees, there would be no downside to adding employees with a more liberal entry requirement. I would appreciate any comments on the advisability of this.