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.

Pattern

Consider TRA's 3(16) Plan Administration Relief Services (PARS)

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