FIS Relius

Forfeitures: Allocation Options
Tuesdays with Derrin and Steve

In recent years, the IRS has increased its focus on forfeiture allocations. Despite IRS restrictions on “carrying” forfeiture balances, many plans continue to have such balances. Forfeitures can improve plan economics by reducing contributions and paying plan fees. However, if the plan is not designed correctly or the employer does not properly apply plan provisions, the failures can potentially increase costs and result in costly corrections.

To properly apply the rules regarding forfeitures, practitioners must understand all of the rules and options regarding forfeitures. This web seminar focuses on those rules and options.

Topics include:

• Allocations options
• Improper forfeiture options
• Carrying forfeiture accounts
• Fee payments from forfeiture account
• Forfeiture events
• Timing of forfeitures
• Nondiscrimination testing
• Reporting
• Plan provisions
• Offsetting employer contributions

Prerequisites: There are no prerequisites or advance preparation for this program. However, the instructor will assume attendees are familiar with the basics of 401(k) administration.

Level: Intermediate

Instructional Delivery Method
Group - Internet-Based

Speaker: S. Derrin Watson, J.D., APM
Recipient of ASPPA's 2006 Educator of the Year Award

Objectives: After attending this Web seminar, an attendee should be able to:

1. Determine when a forfeiture arises
2. Determine when a plan must allocate forfeitures.
3. Determine whether it is better to use forfeitures to increase or reduce contributions
4. Determine when you can use forfeitures to correct plan failures
5. Report fee payments from forfeiture accounts
6. Determine the difference between a forfeiture account and a suspense account
7. Determine the proper uses of forfeitures.
8. Correct a failure to allocate forfeitures timely
9. Test forfeiture allocations for nondiscrimination
10. Determine which allocations a forfeiture may offset

Hardware System Requirements: 

• Windows 95, 98, NT 4.0, 2000, XP, Windows 7
• Internet Explorer 4.01 or later, Netscape 4.08 or later, and set Internet browser to allow pop-up windows.
• High-speed Internet connection.
• Pentium 166+ MHz, 128MB RAM or more.
• 1023 x 768 or higher display resolution.
• Soundcard and Speakers.

Software Requirements:

• Silverlight Version 4 is required. Silverlight Version 5 or higher is preferred.
• Silverlight 4 System Requirements Information: http://www.microsoft.com/getsilverlight/locale/en-us/html/installation-win-SL4.html
• Silverlight Downloading:
  • If you do not have Silverlight on your desktop, you should see an automatic pop-up window that will allow you to install it.
  • If you don't see the pop-up window, or if you wish to install this application before you access the recording, you may download it from this location: http://www.microsoft.com/getsilverlight/get-started/install/default.aspx 
• If you have questions or need assistance with accessing/downloading Silverlight, please contact your IT or MIS department.

Program related requests, questions, or concerns may be emailed to: relius.education@sungard.com.