Bogus SSN used for employment. Plan Now Terminating

[Vikram Kalra]

A former employee used a bogus SSN when hired.  The employee became a participant and earned profit sharing and safe harbor benefits (no 401(k) deferrals).  The participant was one day arrested for domestic battery and then found to be in the country illegally.  The participant was subsequently deported and never heard from again.  Numerous attempts were made to find and reach the individual, but all were unsuccessful.  Now, the plan is scheduled for termination.  What are some ideas on how to handle this account?

[Bill Presson]

Talk to Penchecks Trust and see if they can offer any help.

[Bob the Swimmer]

Sorry about from the hip answer---Depending on plan document, we had several bogus SSNs for a south Texas employer and I believe that forfeitures to the other employees or reducing that year's contribution was the way we went. If not desired, they could also pay plan expenses if the forfeitures allow it (or with a plan amendment to allow).

[Vikram Kalra]

Bob, thank you.  This is what we ended up doing after speaking with an ERISA attorney.  Forfeited and then paid expenses and made pro rata contributions.  The company is holding this amount on a ledger in case he ever resurfaces.