Guest Born2Run Posted July 23, 2009 Posted July 23, 2009 Plan is daily valued w/match subject to vesting schedule. When someone is paid out, non-vested amounts go to forfeitures on date of distribution of vested portion to employee. Plan uses forfeiture account to pay admin fees. Question-Document reads that forfeitures occur on last day of plan year. So do we have an issue? And volume submitter checklist we are working off of does not have option that forfeitures occur on day of payout so we'd have to change vs language. The problem we see is that if we wait til last day of plan year, how can all expenses be paid on 12/31 and if they are not, can we really roll the forfeiture bucket to pay the next year's expenses???
Bird Posted July 24, 2009 Posted July 24, 2009 I think I'd continue to do what you are doing. I think you can argue that you are just "pre-using" forfeitures that are going to happen anyway on the last day of the year. The other possibility, as you note, is to let them sit and use them the following year, but accrue them as fees in the current year. That's not 100% consistent with the typical cash or modified cash accounting that is used for plans, but so be it, I don't think it would be challenged. Ed Snyder
Bill Presson Posted July 24, 2009 Posted July 24, 2009 Why not just amend the plan to say forfeitures occur on payout? Then your plan would match your operation. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
Guest Born2Run Posted July 24, 2009 Posted July 24, 2009 Why not just amend the plan to say forfeitures occur on payout? Then your plan would match your operation. BP- Issue is volume submitter template does not allow that option so we are hesitant to change the vs underlying language for this.
Bill Presson Posted July 24, 2009 Posted July 24, 2009 Why not just amend the plan to say forfeitures occur on payout? Then your plan would match your operation. BP- Issue is volume submitter template does not allow that option so we are hesitant to change the vs underlying language for this. You did mention that. Can you use someone else's document? That seems to be a pretty standard provision. William C. Presson, ERPA, QPA, QKA bill.presson@gmail.com C 205.994.4070
WDIK Posted July 24, 2009 Posted July 24, 2009 Who is your document provider? (If you don't mind sharing.) ...but then again, What Do I Know?
Guest Born2Run Posted July 28, 2009 Posted July 28, 2009 Who is your document provider? (If you don't mind sharing.) I messaged it to you.
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now