FAQ 295: Allocations--Reinstating a forfeiture from prior period


I have a situation on a plan we do semi-annual administration for. A participant withdrew his vested balance last period, and his EE value screen shows his non-vested amount in the Amount Forfeited screen so his ending balance *last* period is zero. And he was coded as F (terminated and forfeited).

But he's been rehired in the current period and the plan says he gets his forfeited balance back. I thought I could simply enter a negative value in the current Amount Forfeited screen and that actually works UNTIL I then change his coding back to Active (also tried Active-Recompute) but doing that changes his beginning balance from zero to basically ignoring the value in the Amount Forfeited screen. But in order for him to get a portion of this period's earnings, he can't still show as Code F either.


Here are the steps to take to reinstate his forfeiture and to allocate earnings on that reinstated amount.

1. Change his status code to an "S"
2. Go to Account Values, Values, Fund 1, Profit Sharing Source and under the Prior Column take out the figure in the "Amount Forfeited" field and enter it into the "Transfers Out" field in the Prior Column.
3. Under the Current Column enter the reinstated amount under the "Transfers In" field.
4. Go into Plan Specs, View, Source, Profit Sharing and on the bottom of the screen enter 1.00 in the Transfers field (this will make sure the transfer in is included in the earnings allocation base).
5. Rerun complete calculations and you should be all set.

Also, is the client going to deposit that amount that is restored or are you taking it from other participants? Be aware that my example above does not take it from other participants.