REG- 122286-18: IRS Releases New Proposed Regulations on Use of Forfeitures in Qualified Retirement Plans (February 25, 2023)

On February 24, 2023, the IRS released new proposed regulations regarding the use of forfeitures in qualified retirement plans. The new regulations say that forfeitures arising in any defined contribution plan (including in a money purchase pension plan) may be used for three purposes: to pay plan administrative expenses, to reduce employer contributions under the plan, or to increase benefits in other participants’ accounts in accordance with plan terms. The regulations also contain a deadline for the use of forfeitures, requiring that plan administrators use forfeitures no later than 12 months after the close of the plan year in which the forfeitures are incurred for plans that start on or after January 1, 2024.

See REG- 122286-18

Posted by Benjamin Sapozhnikov, Associate Editor, Wealth Strategies Journal.

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