Forfeitures/re-hired employee

[Lynn Campbell]

Employee terminated during Plan Year, paid 20% vested amount = $105 , and forfeited the balance. Re-hired in same plan year, completes more than 1000 hours, and re-joins the Plan. it is time to allocate his forfeitures. Since he is back, can I allocate these forfeitures to all participants, including him? Or should I offer him the chance to repay his distribution, as provided by the plan, and hold his "forfeitures" in suspense? Thanks for all input...

[Guest dmj1998]

Lynn - when you mention "as provided by the plan", it sounds like your plan has a buyback feature. This would allow a rehired participant to pay back the distribution and rec. what was forfeited from the earlier distribution. I say that the forfeited amount attributable to that participant be segregated before any allocation to the entire population takes place, unless the plan sponsor wants to fund the buyback when and if the participant takes advantage of it.