K2retire Posted October 20, 2011 Posted October 20, 2011 I am at a loss as to how to deal with this situation. Our client has a bundled 401(k) plan with a well known insurance company. The Corbel Nonstandardized document clearly specifies that match forfeitures must be reallocated as an additional match contribution. The match forfeitures were reallocated to the match money type, but the allocation was done on a pro-rata basis to eligible participants without regard to deferrals. When I questioned the provider about this I was told that if the client wanted the match forfeitures to only go to participants who deferred, they needed to specify that in the allocation conditions in the document. The base plan document clearly defines match as a contribution made on account of deferrals, which is exactly what I've always understood. But this provider disagrees.
QDROphile Posted October 20, 2011 Posted October 20, 2011 I have always designed forfeitures to to offset contributions. Under that approach, you have correspondence between deferral and match. See Treas. Reg. section 1.401(m)-1(a)(2)©. I think that says you have to have to allocate on the basis of employee contributions, deferrals or matching contributions. A participant with no contirubutions or deferrals will not have matching contributions either, so no allocation of forfeitures would be a matching contribution. Q: What is the difference between a cat and a match?
masteff Posted October 20, 2011 Posted October 20, 2011 specifies that match forfeitures must be reallocated as an additional match contribution. See Treas. Reg. section 1.401(m)-1(a)(2)©. I think that says you have to have to allocate on the basis of employee contributions, deferrals or matching contributions. I personally would read "additional match" as an allocation based on matching contributions (so everyone's match goes up proportionately). Q: What is the difference between a cat and a match? I give, what's the difference between a cat and a match? Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
QDROphile Posted October 20, 2011 Posted October 20, 2011 Old riddle. A cat lights on its feet. A match lights on its head.
K2retire Posted October 20, 2011 Author Posted October 20, 2011 Thanks for the citation. The riddle is also great.
QDROphile Posted October 20, 2011 Posted October 20, 2011 A better riddle: What is the difference between a cat and a comma? Hint: "tail" is not involved in the answer unless you come up with an unexpected answer. Sorry, I am out of match riddles/jokes that are fit for public consumption.
GMK Posted October 20, 2011 Posted October 20, 2011 Snap! I knew this one, but I guess I'm going down in defeet.
QDROphile Posted October 20, 2011 Posted October 20, 2011 Good one! You may have to hesitate a moment in that location.
GMK Posted October 21, 2011 Posted October 21, 2011 Sounds like a hint. Thanks. Maybe if I just sit still and scratch my head. Or maybe Santa will bring me the answer if I wait a little while longer. Happy Friday.
ESOP Guy Posted October 21, 2011 Posted October 21, 2011 Google can ruin everything, even a good riddle http://answers.yahoo.com/question/index?qid=1006052402489
JanetM Posted October 24, 2011 Posted October 24, 2011 QDRO that was too funny. The answer was a tounge twister like Peter Piper. JanetM CPA, MBA
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