EPCRS

[Guest jhahn]

Does anyone know whether forfeitures can be used to make (or offset) the amount of corrective contributions an employer is required to make to a 401(k) plan where the plan has improperly excluded eligible employees from making pre-tax deferrals and receiving matching contriubtions? Rev. Proc. 2002-47 indicates that forfeitures may be used to make "corrective allocations" but it is unclear (to me) whether "corrective allocations" and "corrective contributions" are interchangeable terms. I fear that corrective allocations are only intended to correct failures related to the improper exclusion of otherwise eligible employees from receiving profit sharing contributions.

Thanks in advance for any insights.

[Guest timeout]

Not sure about all of your specifics - e.g. current plan year discovery, prior plan year(s) ... both ...

It is not uncommon for a good ERISA Attorney to provide input regarding these matters.

Since the post is fairly open ended - I will venture out the following trying to tie into the forfeiture:

If it is a prior year defect, and the plan doc. says match forfs reduce the ER's match contribution, one may think that the plan already used the available match forfeitures, or some plans still allocate match forfeitures - so may be the plan is in the process of allocating them - in either case, I will offer corrective contribution is where the ER kicks in the (k) and (m).

If this is a current plan year discovery, then one may find that the defect is only a partial one having to do with the (k) exclusion, and the match contribution/match forfeitures would get applied per the current year.

Just some thoughts ...