Forfeiture Reallocation

[bevfair]

Plan has regular match forfeitures that occurred after the safe harbor match was implemented, due to non-vested terminated participants taking their distributions. Document allows us to pay expenses from forfeitures however the contract is written such that we don't bill the client directly. I'm left with a few grand in forfeitures to allocate to roughly 18 people. Plan is top heavy and the key defers. The only other option currently in the plan allows me to reallocate with employer contribution or on a salary ratio basis. Client wants to amend the plan at the end of the year, for future years, to use any new forfeiture to offset an additional employer match. (Plan document doesn't currently allow for match in addition to the safe harbor match). The client also wants to 100% vest this new match source. Can forfeitures be used in this manner? I thought I read that forfeitures that originated from non-vested accounts could not be allocated as a money type that would be 100% vested (the reason we can't use them to offset safe harbor match)? Or am I reading too much into that position? Thanks.

[Lou S.]

You can't use the forfeitures to fund a safe harbor contribution, QNEC or QMAC but there is nothing that I am aware of to stop you from using it for a discretionary match that happens to be to a 100% vested source.

[BG5150]

But doesn't this discretionary match, on top of the SH Match cause the Top Heavy minimum to be due?

[bevfair]

Top Heavy will be triggered anyway if we just reallocate the forfeitures. It seems like a no win situation. Unless someone has a more creative idea?

[buckaroo]

A discretionary match that meets the ACP safe harbor will not cause a TH min to be required. (Plan will still be deemed not TH.) EOB Chapter 11 Sec XIV Pt. H2