FAQ 386: Allocations--Forfeitures reallocated to another source


Is there any way to have the contribution/forfeiture calculation reallocate forfeitures to a different employer source? We have several examples, but the most common are profit sharing plans that had a money purchase plan merged in to them. The terminated participant forfeits the MPP source, but we can't figure out how to get it to reallocate to the PSP source.


The only "automatic" option available is to use Source 2 forfeitures to offset a Source 3 Match contribution. Other than that, you would need to show a transfer of the amount from the current source to the reallocated source for the forfeiting employee, then run the calculations to reallocate from there.