Illegal Alien with false identification in profit sharing plan

[UtahCPA-APA]

An illegal alien with false documents was hired in 2006, and starting participating in the profit sharing plan in 2007. His illegal status was just discovered, and he has not returned to work. The Employer does not want to pay him any pension benefits, because he was hired and participated under false pretenses. Only discretionary Employer Contributions are in the plan. Is there any authority for forfeiture of the account and reallocation to remaining participants?

[masteff]

Lots of old threads on the subject... basic jist is don't confuse plan participation with immigration, what does your plan document say, and what does your legal counsel say?

http://benefitslink.com/boards/index.php?showtopic=49539

http://benefitslink.com/boards/index.php?showtopic=37665

http://benefitslink.com/boards/index.php?showtopic=20082

http://benefitslink.com/boards/index.php?showtopic=22202

http://benefitslink.com/boards/index.php?showtopic=25110

http://benefitslink.com/boards/index.php?showtopic=28822

http://benefitslink.com/boards/index.php?showtopic=39779

http://benefitslink.com/boards/index.php?showtopic=40702

http://benefitslink.com/boards/index.php?showtopic=46450

[mbozek]

An illegal alien with false documents was hired in 2006, and starting participating in the profit sharing plan in 2007. His illegal status was just discovered, and he has not returned to work. The Employer does not want to pay him any pension benefits, because he was hired and participated under false pretenses. Only discretionary Employer Contributions are in the plan. Is there any authority for forfeiture of the account and reallocation to remaining participants?

In order to obtain benefits, an illegal alien who used false documentation to obtain employment must provide the plan with official documents which prove his identity such as a passport which has his photo in order to receive payment. The plan would then revise its records to state his true identity.

Second the individual must get an ITIN from the IRS under his real identity which will allow the payment to be reported for tax purposes. In order to get an ITIN the individual must provide evidence that SS has rejected the individual's application for an SS number.

Given the difficulties of getting the necessary documents to obtain benefits it is unlikely that the participant will ever claim benefits. If the plan has a provision that permits forfeiture of benefits due to the inability of the plan to locate a participant whose benefits are due, the benefits will be forfeited if the participant cannot be located, subject to restoring benefits if the individual provides proof of identity and an ITIN at a later date.

[Guest smhjr]

Thanks Masteff and Mbozek. Apparently I need to learn how to use the search better. I looked for illegal alien and hardly anything popped up.