Forfeiture restoration by source?

[John A]

Participant was paid a distribution of:

$10,000 from 401(k) account.

$600 from match account (forfeited other $400).

$700 from profit sharing account (forfeited other $300).

When the participant is rehired and meets other requirements for buy-back, does the participant have the option of:

1) Repaying $600 to match account to have match account restored, but not repaying profit sharing account?

2) Repaying $1,300 to have both match and profit sharing restored?

Or is the only allowable option to repay $11,300 to 401(k), match and profit sharing to get the forfeited amounts restored?

[rcline46]

Very good question.

I reason this way:

There is no buy back for a 100% vested plan distribution, so 401k does not count (remember, for Schedule T purposes you have 3 plans here!)

For the other two plans, I think you have to do both, but the document (most likely) does not specify the buy back is by 'plan' and the entire distribution must be returned. In your example, the entire $1,300.

[RTK]

I think the plan can require repayment of entire distribution (401(k), match and profit sharing) for restoration of the forfeited match and profit sharing, or can permit participant to repay just match or just profit sharing and have respective forfeiture restored. Thus, you need to review the plan document. I can't recall ever seeing a document, though, that permitted repayment by source or type of contribution.