Partial Plan Termination

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After the plan year end it was determined a partial plan termination had occurred. Some of the affected participants had been paid out during the plan year. I am assuming when the forfeitures are restored no earnings adjustment needs to be calculated correct?

Any thoughts would be appreciated.

[Lou S.]

I'm not aware of IRS formal guidance on whether or not earnings has to be restored but when we have encountered a partical termination like yours we have taken the same position you have. On one determination letter request we restored the forfeitures without earnings and the IRS did not seem to have a problem with it but the answer may or may not change depending on the reviewer.