Forfeitures and deferred sales charges

[Guest Amy Harle]

Can a terminated plan use forfeitures to pay for deferred sales charges in a deferred annuity contract?

They currently use forfeitures to reduce contributions (and hadn't used all of them) and the document doesn't speak to forfeitures after plan termination.

[mbozek]

Why not amend the plan to permit additional contributions equal to the amount of the surrender charges. The forfeitures have to be used for something upon terminaton. Otherwise they are subject to 50% excise tax if they revert to the employer.