Forfeit related match

[Guest Jennyb473]

I have a plan that failed ADP (passed ACP) - ADP correction method is to refund to HCE since participant is not catch up eligible. There is related match that needs to be refunded. The participant is 100% vested. Do I refund or forfeit related match? I've been reading some old posts on this and everything talks about running ACP first to correct and then you may not need to forfeit but might be able to distribute since participant is 100% vested. But I pass ACP, so how is running that first going to help me? I thought I needed to forfeit his match but am just further confusing myself now. I use Relius and there is no nice way to do forfeitures of related match so I wanted to make sure I was doing this right - I thought Relius would have a way to do this as it is not an uncommon thing, but apparently not.

thanks!

[fiona1]

Hello. The related match must be forfeited. This type of match is commonly referred to as related, associated, or an orphan match. Any way you look at it - it has to be forfeited because the HCE is receiving a higher rate of match after you account for the ADP refund.

The same situation can occur if a plan participant has rec'd an excess deferral refund for going over the $16,500 402(g) limit. If there is a match associated with an excess deferral refund - it must be forfeited as well.

[Guest Jennyb473]

thanks for the response - that is what I thought, but wanted to be sure