allocation of forfeitures

[Guest le190]

Must a profit sharing document state how forfeitures are to be dealt with in a plan? For example, must the document clearly state whether forfeitures are to be:

re-allocated to eligible participants

used to offset future ER contributions or

used to pay expenses of the plan

or may any of these options be used, regardless of what the document states?

thanks for any help.

[Ervin Barham]

The document has to spell out what to do with forfeitures. If you don't see it in your adoption agreement, then check the basic plan document.

Most documents allow for some or all of the above or even a combination of the three.

[This message has been edited by Ervin Barham (edited 09-30-1999).]