My former employee leaves contibutions in the plan post termination until 5 year of non-service have past. Then the constributions are forfeited. However, the summary plan description says that the participant is always entitled to their contibutions and the earnings on both the employee's and the employer's contribution. When the five years had passed, the conpany contributions were withdrawn, but the earnings on those company contributions remained. In fact the comapany issued me a letter explaining this and stating the amount to be removed. Subsequently (one year later), the plan administrator has changed and in the transfer, the earnings on the company contributions were removed.

To me this seems to violate the plan. Any suggested course of action?

I need some more information to be able to give you an answer.

1) What is the vesting schedule for your plan?

2) How long did you work there?

3) How long were you gone before they forfeited your balance?

4) What was your vested percentage?

5) What money Types are involved? Employer Discretionary Contributions (Profit Sharing), Employer Matching Contributions, Salary Deferrals (always 100% vested including any gains or losses on them), others?

I must admit I have not had a plan that forfeited only the employer contributions and let the employee keep the earnings? (It would require the administrator to track the contributions to each participants account.)

Thanks for your interest.

The vesting schedule is 5 years. Zero vesting unitil five years and 100% after five years. I worked there four years. As such I was not vested. I was gone 6 years before they forfeited my balance of company contributions. The plan states that company contributions are left in the plan until after 5 years of non-service. When they did remove the contributions, I was provided a letter explaining that they should have removed these at 5 years, but they would do it at six, and they specified the amount to removed. The amount removed was the actual contribution, excluding earnings on contributions. The employer not only tracked contributions by account, but also specified on every statement the value on my deposits the company contributions, the earnings on my deposits and the earnings on the company contributions.

The employer contributions were matching contributions

Thanks

Just a guess, but the plan probably states that former participant's forfeit nonvested balance after 5 one year breaks in service. You are not entitled to earnings on nonvested money. From the facts you presented, I don't see that you have been wronged.