Partial Plan Termination & Reinstate Forfeitures

[Gruegen]

If participants who are "affected" by a partial plan termination in a DC plan have already taken a distribution from the plan and the amount the participant previously forfeited needs to be reinstated to their account, should the amount reinstated be adjusted for investment earnings?

I don't consider this to be a "mistake" that necessitates investment earnings, but perhaps the IRS would disagree.

[Lou S.]

I don't think there is anything in the code about restoring earnings. I think you just need to restore the amount forfeited w/o earnings when partial termination is determined.

[QDROphile]

The plan should say that restoration will be done based on the balance at time of forfetire, withou adjustment for earnings.