Forfeiture buy-back practices

I have a large plan (over 300 lives) with a lot of rehires.  Just wondering what the general practice is for other administrators.  Do you provide formal notice of the forfeiture buy-back option to the affected participants?

All participants should receive the SPD, and the SPD contains a description of the provision for restoration of forfeitures after re-employment, so yes, they are provided a formal notice.

Agree with C.B. Zeller. There is no regulation that requires a particular notice or disclosure, so the natural vehicle is the SPD. Note that the payback period is so long (typically, 5 years), that as long as the SPD explanation is clear, the participant is likely eventually going to figure it out in time.

Brenda, while there may be no regulatory requirement, your HR department may not want to deal with an angry employee someday.  We know employees don't read.  You have to be okay in making the business decision not to inform the rehires.  The DOL wants us to track down missing ex-employees, do you really think rehires are not going to be an issue at some point for the DOL?  We had a rehire policy; we used it as part of our rehire efforts.  This is one of those things that's a business decision.  They're coming back to your company for a reason; I suggest you don't give them a reason not to be happy with their return.  I say do the analysis and see how much money you're dealing with.  So many won't buy back their vesting or forfeitures anyway, it at least makes the company look transparent.

I definitely like the idea of putting it back on clients to see if THEY want to go above and beyond for their employees.  Some will be "absolutely I don;t want to "cheat" anyone out of what they are entitield to" and others will be like "No, let them come to me.,"  And I think I would know which clients would say what!

To make practical you would have to code your HRIS or 401(k) software so that if (a) a soc sec # that was previously entered as someone entitled to a distribution on termination is reentered as new hire and (b) both (i) the person received a single sum distribution in connection with the termination and (ii) he or she was less than 100% vested and had a forfeiture before he or she returned, then (c) the person would be sent a reminder about the cash-out and buyback rule. This could be in the form of an email, a letter, a text; could explain it and use the person's actual numbers/facts, or just refer to a Q&A in the SPD for further detail. Could be repeated throughout the 5-year buy-back period, or not. Whatever. I'm not saying it's not possible or a good idea, I'm just saying I don't think this is done much. I could be wrong.

Yes, referring to Luke's comment we would have a special HRIS flag for each of the following:  rehires; EEs who were acquired from an acquisition; interns to perms; Interns; temps; EEs having reached 1,000 hours; and involuntary terms.  When we were advised of a rehire we did a special rehire memo to them at the time of hire, and also, if applicable, we advised them of their buy-back rights with numbers like Luke advised via a separate one-time only email.