Matching Forfeitures not allocating correctly

[TPAVP]

I am trying to allocate matching forfeitures. Only those who deferred should be receiving a forfeiture, but it is allocating forfeitures to everyone. I have the basis for forfeiture allocation to be "in the same manner as employer contribution", which I took to mean whatever employer contribution I was forfeiting, in this case being the matching employer contribution. I also have the basis for matching contributions on the Allocation Provision screen to be YTD deferrals. Any guidance???

[Guest]

verify what documents says to do with match forfeitures.

based on your description, syste is doing what you told it to do, but this might not be what you want it to do.

there are 3 possible codings for match forfeitures:

1.increase discretionary match - this option only makes sense if match is not required (e.g. if match is 50% up to 6% deferred this option makes no sense

2.forfeitures reduce match YES - this would be used for a required match. No one will receive match forfeitures. you get a total match contribution on your summary of accounts, and then reduce this figure by the match forfeitures and tell the client how much to put in.

3. forfeitures reduce match NO. I think this will simply allocate comp to comp. This is not 'but only to those who deferred'

(I have never seen a document that said to handle it this way, but that doesn't mean it isn't possible)

if match is indeed to be allocated comp to comp, it would be better to run it

1. hold match in suspense

2. adjust suspense account (zero out match suspense, put the same amount in the profit sharing forfeitures

3. allocate out of suspense.

This puts the forfeitures in a logical place and you do not have ees who did not defer but have $ in a match account, which can really look puzzing.

the basis for matching contributions I do not believe has any effect on the forfeitures. System calculates total match contribution based on how you code this and generates the match contribution. then, if necessary, as mentioned above, you tell the client, your match for the year is 10000 but you have 1000 in forfeiture so actually match you need to deposit is only 9000.

clear as mud, right?

[TPAVP]

The document actually says that forfeitures are used to supplement matching contributions, so I think I need to say that forfeitures are used to reduce then allocate the forfeiture as a contribution.

Thanks for the help.

[Guest Sue Michalski]

In Matching provisions in plan specs, I would change the basis it ytd employee contributions. That way Q knows who to give it to.