Forfeiture Use in a Plan

[mlp0816]

I have an indiviudally drafted 403(b) PS Plan that has a 5 year vesting schedule. I have read the document 5 times but no where does it state how to use the Forfeitures? Has anyone come across this?

[QDROphile]

Come across incompetence in drafting? Sure. I am suprised that the document got a determination letter if it really does not address dispostion of forfeitures.

[ESOP Guy]

One practical suggestion if you haven't done this already. If you have the document as a Word or pdf file search on the word forfeit. I have on a number of occasions not found what I was looking for by reading only to find it when I search on the right word. I am amazed at all the odd placed attorneys find to hide provisions.

If you have Adobe Acrobat (not just reader) you can scan the document and then you should be able to:

scan a paper document

then in Acrobat under Documents

OCR text recognition

Recognize text using OCR

It can take a while that allows you to search a scanned document.

If I am explaining things you know and have done sorry not trying to insult your intelligence it is just plan documents are large and I have found this helps me find what I am looking for in plan documents.

If there is no section dealing with it I would go back to the attorney who drafted the document and have them solve it. It really is their bad. One possible solution is that all documents give the administrator discretion to interpret the document including where silent in a reasonable nondiscriminatory manner. You would think a reallocation or used to pay expenses would be reasonable and nondiscriminatory.

[John Feldt ERPA CPC QPA]

The IRS does not issue determination letters for 403(b) plans. If the plan truly does not address the issue, you'll need to look at the past administrative practices for handling these 403© accounts (they're not 403(b) if they are not vested), then compare those admin practices to the code and regulations to make sure it's reasonable to continue, and if not, to bring that up to be addressed by the employer (and by recommending an amendment to provide written language).

[K2retire]

FT Williams doesn't mention how to use forfeitures in the 401(k) adoption agreement. It is in the base plan document. After years of using Relius documents, it took asking someone else for me to find that!