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Showing results for tags 'terminating plans'.
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Hi. Client is terminating a 401k Plan. There is a sizable amount in the forfeiture account. Even after paying expenses, there will be a balance left over. The document says that forfeitures are allocated first to restore previously forfeited amounts to participant accounts. Thereafter, remaining forfeitures are used to: offset Plan expenses reduce future matching contributions reduce future nonelective contributions Since we are terminating, and thus there will not be any future contributions, how should we allocate the remaining forfeiture balance? Pro-rata to participants according to?? Thanks.
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Non-publicly traded ESOP large plan is terminating. Plan is a 12/31 year end. Plan terminating amendment was prepared by ERISA attorney who provides the document and executed by the client (6/17/18) to terminate the plan as of 6/30/18. Included in the amendment was a change in definition of compensation. It defines compensation as the 12 months immediately prior to 6/30/18 (7/1/17 - 6/30/18), therefore, using full year compensation for the allocation. Removed the hours requirement and stated the contribution would be allocated to all eligible employees who were employed on 6/30/18 based on full year compensation. Anyone else have experience with this type of change? The 7/1/17-12/31/17 compensation was already the basis of allocation for the 2017 plan year. Can this same compensation be used as part of the basis of allocation for the 2018 plan year?
