If the forfeitures of a target benefit or money purchase plan exceed the contribution formula amount, what is done with the forfeitures that exceed the amount? Can they be placed in a suspense account? Does it matter if the forfeitures exceed the formula amount because the plan sponsor made an actual contribuiton in addition to the forfeitures?

Hire an ERISA attorney to give you an opinion as to what to do with the surplus and pay his fees out of the plan. That should eliminate any surplus.

Nice one Kirk. I got a good chuckle out of that one. Not to mention it is a day we all need to find something to laugh a little.

Could it not be held over and applied the following year? Let it sit in a stable account, earning interest, and use it for fees or the next years contribution. The plan will need to be restated soon, that should cost a little. I am sure many others with much more experience will have a better answer.

In the my past life as an admin, we held the surplus in a suspense account until the next year - need to be sure and release in the next plan year though - we had a few that went without relase until review by supervisor - had to make some swift changes. Be sure you somehow flag that plan for careful review in the next year.