CurlyBert

The Plan Document does not commit to a date, the Adoption Agreement simply elects the "Discretionary Contribution" option. However, we do have a handbook distributed to the employees eluding that the discretionary contribution will be deposited within a certain window.

I am trying to get a definite answer on this question, any prior discussion seems to skate around the issue. Can a Plan Administrator use forfeiture assets to fund the lost opportunity cost portion of a missed discretionary contribution (i.e - Profit Sharing)? I am certain that forfeiture assets cannot be used to fund the lost opportunity cost portion of "required contributions" (either employee or employer) because this is in direct violation of a fiduciary's "Prudence Standard" as well as a Prohibited Transaction, accordingly, when these types of contributions are delinquent the plan has a claim against the employer. However, Field Assistance Bulletin (FAB) 2008-01, specifically states that "employer contributions become an asset of the plan only when the contribution has been made". Under this definition because the contribution is not late it cannot be a PT; but does the fiduciary still have a duty to collect creating a claim against the employer for the lost opportunity portion. I am inclined to say that forfeitures cannot be used to fund the lost opportunity cost portion of a missed discretionary contribution. I don't see any language that qualifies the lost opportunity cost as an expense eligible to be pulled from the forfeiture account, and transferring the lost opportunity cost from the forfeiture to the participant does not make the plan whole.

Are there any grounds to have a participant's deemed distribution within a 401(k) plan reversed? Are there any reg's that might list certain criteria that must be met? The loans deemed status occurred in 2017, if the record keeper already submitted the 1099-R is there a precedence for reversing it? Lastly, if there are grounds for reversal is it required that the process go through VCP? Your help is appreciated.