To register for Relius Education seminars and conferences, please login or register for a new login account before proceeding. For more information, please see the Benefits of a Relius User Login Account. For assistance, please contact Client Services at 800-326-7235, and select Option 6.

Focused Topic 12: Forfeitures: Allocation Options
Presentor: Derrin Watson Recorded Date: 12/10/2013 Duration: 60 Min.

This program was recorded during a live presentation on December 10, 2013.

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:

Program related requests, questions, or concerns may be emailed to: