FAQ 708: Forfeitures--How to code someone to forfeit who has not yet been paid?

Problem: I changed the participants' status codes to F (termed and forfeited) and the system forfeited their entire account balance. These participants are partially vested and have not been paid, but have incurred a 5 year break in service. How do I get ASC to only forfeit the non-vested portion of their accounts?

Solution: Forfeiting people with 5 breaks in service is a little tricky. Since you only want the system to forfeit the non-vested portion of the account, you cannot use status "P" or "F", since the system assumes that both of those statuses are 0% vested. Unless it is a very small plan and you can use a system-assigned status, like "T", because no one else has that status, I would suggest using a status like "G" (or some other unused letter like "V" or "Z"). Change the employee's status codes to "G" in his or her record, and make sure that the current vesting percentage on the Vesting screen is what it should be as well. Then go into the general plan specs, go to the Group Definition screen, input "PF" (no quotes) in the Group #A box and "G" in the Group #B box. Next, go into the applicable source spec screen(s) and input group "B" in the "Groups Forfeit Non-Vested Benefit" field, and save the specs. If you want the status "P" and "F" employess to forfeit as well, change the Groups Forfeit Non-Vested Benefit field to "AB", rather than just "B" and save the specs. Then, when you run calculations, the system should apply vesting and just forfeit the non-vested portion of the account.