Forfeitures to reduce er contributions - QNECS and S/H NECs

[MarZDoates]

I just read a bulletin that said the IRS, in a Q and A session, has taken the position that forfeitures can not be used to reduce the employer's safe harbor non-elective contribution and also cannot be used to reduce the employer's qnec contribution to pass a failed ADP test.

Does that sound correct? Am I missing something?

[austin3515]

Check out this recent thread...

http://benefitslink.com/boards/index.php?showtopic=46961

[pmacduff]

FWIW - I recently (11/02) attended a Corbel seminar by Derrin Watson and he stated that forfeitures could be used to reduce safe harbor contributions "as long as the Plan Document was written properly" in reference to forfeiture allocations.

He also said that forfeitures cannot be used to reduce any QNECs used to pass the ADP test.

[MarZDoates]

FWIW - I recently (11/02) attended a Corbel seminar by Derrin Watson and he stated that forfeitures could be used to reduce safe harbor contributions "as long as the Plan Document was written properly" in reference to forfeiture allocations.

He also said that forfeitures cannot be used to reduce any QNECs used to pass the ADP test.

OOOOPS....

[MarZDoates]

Check out this recent thread...

http://benefitslink.com/boards/index.php?showtopic=46961

Thanks for the link. Good info!