Forfeitures in a Terminated MP Plan

[MarZDoates]

Client has a PSP and MP Plan. He is terminating his MP plan effective 1/02....no benefits will accrue after this date. Per plan provisions, forfeitures reduce future contribution.

There is a participant that terminated in 2000 with no vesting. Her forfeitures were never used to reduce the 2000 or 2001 contribution. Now what do we do with the forfeitures left in her account? I would think we could reallocate among remaining participants and then terminate and distribute the assets. That's probably too easy.

Any suggestions? Thanks!

[mbozek]

Two choices:

1. Merge the MP plan into the PS plan and use the forfeitures for the benefit of the PS participants or,

2. if #1 is too risky for you, just reallocate the forfeitures among the remaining participants provided the plan can be amended.