Missing participant forfeiture reinstatement on plan termination

[BenefitsBum]

I know the subject of reinstatement of forfeitures on plan termination has been covered before, but I don't believe it was ever in the context of amounts that were forfeited under 1.411(a)-4(b)(6) for missing participants.  The PBGC seems to believe that a plan termination does not extinguish a participants right to claim a reinstatement of such forfeiture.  What about the IRS though?  Does the IRS expect all amounts previously forfeited for missing participants to be reinstated when a plan is terminated?  

[Kevin C]

I think it would depend on what the document says.  Our current VS 401(k) document says this:

Quote

Forfeiture of Account of missing Participant or Beneficiary. If a Participant or Beneficiary is deemed to be missing (as described in this subsection (c)), the Plan Administrator may forfeit the distributable amount attributable to such missing Participant or Beneficiary, as permitted under applicable laws and regulations. If, after an amount is forfeited under this subsection (2), the missing Participant or Beneficiary is located, the Plan will restore the forfeited amount (unadjusted for gains or losses) to such Participant or Beneficiary within a reasonable time in accordance with the provisions of subsection (a)(3) above. However, if a missing Participant or Beneficiary has not been located by the time the Plan terminates, the forfeiture of such Participant’s or Beneficiary’s distributable amount will be irrevocable.

 

[Bird]

19 hours ago, Kevin C said:

However, if a missing Participant or Beneficiary has not been located by the time the Plan terminates, the forfeiture of such Participant’s or Beneficiary’s distributable amount will be irrevocable.

That's very thorough - impressive.  I'd say if it didn't have that language it is implicit - if there is no longer a plan then there is no entity to restore the benefits (the employer perhaps but it's not referenced).  

[ESOP Guy]

I once saw a plan document that did put it back on the employer if the plan was terminated.   It was very clear about that point and I have only seen it once.  

[BenefitsBum]

Thanks all.

[RatherBeGolfing]

On 6/15/2020 at 8:22 PM, BenefitsBum said:

What about the IRS though? 

Dont forget about DOL...