Terminating plan with forfeitures

Client is a small company with a 401k plan.  Current employees are owners and one of owners children.  Last non-related employee terminated in 2018.  There is a small forfeiture of $1,500 in the plan.  No participant has had any income after 2018.

There are no unpaid fees, and no income to base an allocation on.

Allocating forfeiture based on account balance has been mentioned, but I don't see how that would work since forfeiture allocations are annual additions, and 100% of the participants income is $0...

Any ideas other than revising 2018 to allocate the forfeiture?

Thanks!

Was the forfeiture supposed to be allocated in a prior year under the terms of the document?  If so, that's your justification for going back and at least tying it to a year with compensation for at least someone.

Yes, per the document it should have been allocated in 2018, and this is probably the only thing that can be done at this point.  Just hoping someone had an idea I had not thought of yet   

Can't forfeitures pay for plan administration fees?  Maybe will need an amendment?

The plan pays you $1500 in fees and you refund a prior fee (presumably paid by the company)of $1500 to the company .

Thanks all!

On 8/23/2022 at 7:28 PM, Bird said:

The plan pays you $1500 in fees and you refund a prior fee (presumably paid by the company)of $1500 to the company .

Refund?  No, his time is easily worth $1,500 to make a potential "qualification issue" go away 😇