FAQ 668: Forfeitures--Reinstating forfeitures, forcing for one person

Problem: I need to use forfeitures to reinstate a rehired participant's account balance - so I need to allocate less to the other participants that what is actually forfeited. How do I do that?

Solution: Below are our instructions for reinstating forfeitures. Example: Plan needs to reinstate $100 forfeiture to Mr. Smith in his Source 2 Profit Sharing account. Plan has only one fund, named "Fund 1". System calculates a forfeited mmount of $400 in the profit sharing source broken down as follows: Sheryl $250 Jerry $75 Rebecca $75 We need to get the system to allocate only $300 in forfeiture using the chosen forfeiture allocation method. We will then manually input the additional $100 to Mr. Smith in his forfeiture fields. 1. Code Forfeiture Source 2 Specs in the Source Specs as: Force Forfeitures="Yes" and Input Forfeited Amount="No". 2. Run Valuation Calculations. This calculation will then generate the ammounts forfeited (i.e. $400 in our case). 3. Open Sheryl's Account Values Screen, Source 2, Fund 1. Edit her "Amount Forfeited" field, reducing it by the $100 that you will need to reinstate to Mr. Smith (i.e. edit from $250 to $150 in our case). 4. Code Forfeiture Source 2 Specs in the Source Specs as: Force Forfeitures="No" and Input Forfeited Amount="Yes". 5. Run Valuation Calculations. This calculation will then allocate the forfeitures of $300 (original forfeited amount of 400 less the reinstated amount of 100). Once all calcs are Final: 6. Open Sheryl's Account Values Screen, Source 2, Fund 1. Edit her Amount Forfeited field, restoring it to the original amount of $250. 7. Open Mr. Smith's Account Values Screen, Source 2, Fund 1. Edit his Forfeitures field, increasing it by his $100 reinstated forfeitures. 8. Code Forfeiture Source 2 Specs in the Source Specs as: Force Forfeitures="Yes" and Input Forfeited Amount="Yes". This final coding will prevent the system from recalculating either the amounts forfeited or the forfeiture allocation. 9. Run Valuation Calculations one last time - selecting Vesting Calculations, Vested Amounts only. This will reset the vested account balance of the participant with the restored forfeiture to include this restored forfeiture. Note: You must be careful that your calculations are final when using this last coding, as terminees vested ending balances can be incorrect if their forfeitures are not correct. Using this coding will prevent the system from recalculating the correct forfeitures if, for example, you change the fund earnings and recalculate to allocate the new amount. The earnings will be fixed, but the amounts forfeited will not have been recalculated.