Forfeitures used to offset 403b deferrals/loan repayments

[ratherbereading]

Good morning! I have an ERISA 403(b) plan who used forfeitures to offset one payroll.  The payroll, however, included deferrals, profit sharing, disc match, and loan repayments.  Total allocation was $6847.96 and it was offset by $4610.39 from the forfeiture account.  They do their profit sharing and matching contributions each payroll.  What's the fix?

Thanks in advance!

[ETA Consulting LLC]

When you post a question like this, it would help to differentiate the amount of Profit Sharing and Match that was funded on this payroll.  The scale of "problem" would be measured by the amount in which the offset exceeded the match and profit sharing; or the amount of actual deferrals and loan payments that were offset my forfeitures.  The fact that the payroll included deferrals and loan repayments doesn't necessarily constitute a problem.

Good Luck!

[ratherbereading]

The 401k amount for that payroll was $3,564.57; the profit sharing amount was $2,202.66, and the match amount was $679.72.  So it does constitute a problem!

[ETA Consulting LLC]

53 minutes ago, KarolineWriter said:

The 401k amount for that payroll was $3,564.57; the profit sharing amount was $2,202.66, and the match amount was $679.72.  So it does constitute a problem!

Then, you can see where the forfeiture pays the match and profit sharing totaling $2,882.38 and a reduction for deferrals and loan repayments of $1728.01 (which IS a problem).

You "may" look at the option of correcting this as if it were late deposit of deferrals and loan repayments where the $1,728.01 (along with earnings) are deposited back into the forfeiture account.  Each participant's account is whole, since they received exactly what they were entitled to receive when they were entitled to receive it.  The forfeiture account is short. This would appear to be a reasonable method of correction.

Good Luck!

[ratherbereading]

18 hours ago, ETA Consulting LLC said:

Then, you can see where the forfeiture pays the match and profit sharing totaling $2,882.38 and a reduction for deferrals and loan repayments of $1728.01 (which IS a problem).

You "may" look at the option of correcting this as if it were late deposit of deferrals and loan repayments where the $1,728.01 (along with earnings) are deposited back into the forfeiture account.  Each participant's account is whole, since they received exactly what they were entitled to receive when they were entitled to receive it.  The forfeiture account is short. This would appear to be a reasonable method of correction.

Good Luck!

Thanks ETA Consulting!