Vesting schedule applied to Safe Harbor

[CJS07]

Took over another administrators plan and discovered Safe Harbor Match had been deposited as regular Match since 2004. Two individuals were paid out in 2004 and vesting schedule was applied to their Match accounts resulting in $150.05 and $390.65 being forfeited.

The two individuals obviously should have received these amounts. There is currently $3,000 in the forfeiture account. Question is how do I determine what these participants should receive 4 years later??? They should receive some sort of gain but how would that be calculated???

[PensionPro]

Refer to Rev. Proc. 2008-50, (Section 3 of Appendix B titled "Earnings Adjustment Methods and Examples.").

[Guest Sieve]

Remember that a plan can be a safe harbor 401(k) plan that automatically passes ADP & ACP, even though the match has a vesting schedule, as long as the plan also has a fully-vested ADP safe habror contribution of either (i) 3% non-elective, or (ii) match of 100% on 1st 3%, & 50% on next 2%. So, if the plan has a fully-vested 3% non-elective, it passes ADP with this safe harbor non-elective contribution, and therefore it can also pass ACP without a test as long as the match meets certain requirements (& gradual vesting is permitted on that portion of the match).