Employee Benefits partner Summer Conley wrote an article for PLANSPONSOR magazine titled, “An Eye on Plan Forfeitures: Not taking action can hurt you.” Summer discusses employer contribution forfeitures and using forfeiture assets. Summer notes that plan sponsors routinely fail to do anything with forfeiture assets, which presents a problem under Internal Revenue Code (IRC).
Summer states that in order to address forfeitures properly, defined contribution plan documents should explain how forfeitures will be applied. She also notes that failure to use the forfeitures in a timely manner can be remedied via the Employee Plans Compliance Resolution System (EPCRS).
Read “An Eye on Plan Forfeitures.” (Subscription required)