match forfeitures

[Guest mk2308]

recently acquired client (takeover plan) that has "old" match forfeitures. according to plan document, match forfeitures are used to reduce the matching contribution, but client has been a safe harbor plan (basic match formula) for several years, and continues to do so. can client use these match forfeitures to reduce the safe harbor match contributions?

[g8r]

Yes.

[Guest mk2308]

That's what I thought, thank you.

[Guest cstaton]

I have client that reallocated matching forfeitures (a while back) and did so to all participants, not just those deferring...when perusing the document as well as online research, I haven't found a distinction on whether matching forfeitures should be reallocated only to those participant's who are deferring, or all eligible participants...thank you for any help, or articles that you may provide

(issue arose due to a number of non-participating participants with very minimal balances)

[MWeddell]

Whether the match forfeitures are allocated to all participants or to just those who defer depends entirely on what the plan document says. Either method is permitted by law. If they are allocated to all participants, then they are testing like a nonmatching contribution and not included in the 401(m) test.