What happens to the non-vested portions of terminated participants benefits?
The non-vested portion becomes a forfeiture either at the end of the plan year or at the end of the plan year in which 5 consecutive breaks-in-service occur, depending upon the terms of the plan document. Forfeitures can be reallocated to existing participants, used to offset the employer’s contribution obligation, or used to pay administrative expenses depending on the plan document.
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