Match forfeiture different than nonelective forfeiture

[Jim Chad]

I am curious if I am missing something. The new EGTRRA document, just like the GUST document, makes it very clear that how match forfeitures will be handled is a separate question from how any other forfeitures will be handled.

Are there times when they are required to be handled differently?

[John Feldt ERPA CPC QPA]

Not a requirement, but if matching contributions are contributed on a payroll-by-payroll basis, then it's easier to use a match forfeiture to offset a match made in the following year, rather than in the same year the forfeiture occurs. Whereas, if the same plan provides a nonelective contribution (contributed annually after the year end), then a forfeiture used to offset the nonelective for the same year in which the forfeiture occurs does not have the same logistic problem that the match would. Note: if you use PPD, they will fix the problem in their next release (a software glitch does not allow the forfeiture to be split like that).

[J Simmons]

In my EGTRRA prototype, all forfeitures--match and non-elective alike--are re-allocated in the same manner, as if additional non-elective contributions from the employer for the plan year after the one in which the benefits are forfeited. The IRS had no problem with this simplification in issuing its opinion letter.