Guest Tom Cummins Posted July 5, 2001 Posted July 5, 2001 May the plan forfeit account balances less than $1.00 for terminated participants?
pmacduff Posted July 5, 2001 Posted July 5, 2001 I would make sure that the Trustee authorizes forfeiture and that the Trustees/sponsor is aware that the money would need to be replenished and paid out if the participant ever comes looking for it. Is this excessive backup and will that diminimus amount ever be an issue to the IRS or DOL? One would think not, however in this business, we have seen MANY crazy things happen that don't appear to make sense when it comes to the government entities and Qualified Plans.
david rigby Posted July 5, 2001 Posted July 5, 2001 You might want to check with the plan document as to whether it authorizes forfeitures, without regard to what the Trustee authorizes. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Jed Macy Posted July 7, 2001 Posted July 7, 2001 You won't find any qualified plan that authorizes the forfeiture of deminus amounts because to do so would prevent the plan from being qualified. And therefore to do so and get caught could lead to disqualification. To say it yet another way: there is no statutory support for such a forfeiture.
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