Plan Sponsors Ask…

Question: During the first quarter of this year we have had a number of employees leave our organization, some of which had nonvested employer contributions. Do you have any guidance on how best to handle these?

Answer: The money must be moved into the plan’s forfeiture or suspense account, where it can be used to:

  • Cover other employer contributions already payable by the plan
  • Restore the accounts of rehired employees, subject to certain criteria
  • Pay ERISA-approved plan expenses
  • Make additional employer contributions for existing plan

Regardless of which option a plan sponsor uses, ERISA specifies that any forfeited contributions be used for an appropriate purpose by the end of the plan year.


Consider TRA's 3(16) Fiduciary Services & Plan Administration

To alleviate the day-to-day administrative burdens of yours or your clients retirement plans.