Forfeitures & Quantech

[Guest Tom Borkowski]

We are using Quantech in a "Daily Valuation" environment. We are struggling with the issue of forfeitures and how to best handle them given Quantechs capabilities (limitations) when it comes to handling forfeitures in a daily environment. We would like to know what other daily Quantech providers are doing. The Quantech suspense account doesn't seem to be the answer because of the issue of not crediting dividends and not including it in automated reconciliation. Some of the things we would like to know are:

Do you leave forfeitures in the terminated participants account intil they are to be used?

Do you leave them in the original investments?

Do you move the non-vested money to a conservative fund (IE money market)? Within the participant's account or a separate mr forfeiture account?

Do you set up a separate participant call Mr. Forfeiture and move the non-vested money. If so, when do you do the move?

Any input would be appreciated.

[Guest]

I refuse to do daily.

But since you have a great first name....

We do use Manulife for a number of cases, so we let them handle the daily end of things. when someone is paid out, the remaining money is moved to forfeiture account. (All forfeitures from all employees) so in this case, the suspense account would work fine. In Manulife's case it is a non interest bearing account which works great administratively, because you can reallocate the forfeitures at any time and not worry about any extra gains (or losses) during the reallocation period. I know other investment houses put the forfeitures into a simple interest bearing fund, so you would have to credit gains (adjust the suspense account to account for those)

so, I guess my response, would be to move the money to a simple interest bearing account (or non interest bearing account) If your forfeitures do not amount to much, I personally don't think the little amount of interest earned is worth the grief.

[Guest mrosenstengel]

> Do you leave forfeitures in the terminated participants account intil they are to be used?

Yes.

> Do you leave them in the original investments?

No.

> Do you move the non-vested money to a conservative fund (IE money market)?

Yes.

It was a bit tedius at first but now we are in the habit of doing a conform end balance to 100% in the money market as soon as a distribution is processed. It makes it much easier at year end to process the forf transaction.

I haven't found allocating gains to be a problem. Unless you have "Term'd and fully paid out" excluded from g/l transactions. Then you may have a problem if those are the only people in the money market as the gain won't allocate.

Hope that helps.