Vanguard Analyzes the Use of Forfeitures in Retirement Plans

In “Avoiding pitfalls in retirement plan forfeitures”, Vanguard states that:

“In defined contribution (DC) plans with a vesting schedule, employees who are not fully vested may leave the plan and the nonvested amounts are considered forfeitures. Plan sponsors have great flexibility in using forfeited amounts in the administration of their plan. The rules surrounding forfeitures may be less straightforward than expected—and some plans have received increased IRS scrutiny for their forfeiture practices.

This Vanguard Strategic Retirement Consulting commentary paper offers sponsors information and insight, and helps them to manage forfeited assets in their plans. The paper also outlines the timing and approved uses of forfeitures and provides additional considerations for forfeiture-related events.”

To read more, click here.