What Is a 401(k) Forfeiture?

A 401(k) forfeiture is generally nonvested employer money that a participant loses under the plan's vesting and forfeiture rules. The participant loses the right to the money; the plan does not lose the asset.

That distinction controls almost everything that follows.

If a former employee has:

• $12,000 of employee elective deferrals
• $20,000 of employer contributions
• 40% vesting in the employer source

the employee's vested employer amount is:

$20,000 × 40% = $8,000

The nonvested employer amount is:

$12,000

That $12,000 can become a forfeiture when the plan's forfeiture provisions say it does.

It does not automatically become employer cash.

A Forfeiture Is Not the Same as an Investment Loss

Suppose a participant's account falls from:

$50,000 to $44,000

because investments decline.

That $6,000 decline is not a forfeiture.

A forfeiture arises because the participant does not have a nonforfeitable right to part of an employer-derived benefit under the plan's vesting rules.^[1][3][4]

The cause is legal ownership under the plan.

Investment gain or loss is market performance.

A Forfeiture Is Not an Ordinary Fee Deduction

A participant can also see an account decline because the plan charges:

• recordkeeping fees
• investment expenses
• administrative fees
• loan-related charges

Those deductions are not forfeitures merely because the participant no longer owns the dollars.

A forfeiture specifically concerns an amount that was subject to loss under the vesting and forfeiture provisions of the plan.

Employee Elective Deferrals Are Not Ordinary Forfeiture Money

Employee elective deferrals are fully vested.

That includes ordinary employee salary deferrals that the participant directed into the 401(k).

The usual forfeiture source is therefore employer-funded money that is subject to a vesting schedule, such as:

• traditional matching contributions
• discretionary profit-sharing contributions
• certain nonelective employer contributions

depending on the plan design.

A participant who is only 40% vested in an employer profit-sharing source can lose the remaining 60%.

The employee's own vested salary deferrals are a different source.

Not Every Employer Contribution Can Be Forfeited

The source matters.

Some employer contributions are required to be nonforfeitable under the applicable rules.

Others can use a permitted vesting schedule.

That is why a participant statement can show:

The employee's total account balance is:

$52,000

The vested benefit in this simplified example is:

$30,000 + $6,000 + $4,800 + $4,000 = $44,800

Potential nonvested amount:

$7,200

The account balance and the vested benefit are not always the same number.

INV-054 covers vesting in depth.

Termination Does Not Always Equal Forfeiture

This is where plan administration often becomes more complicated than the participant expects.

An employee can leave employment today without the plan legally treating the nonvested account as forfeited today.

The forfeiture date depends on:

• the plan document
• whether the vested account is distributed
• whether a deemed distribution rule applies
• break-in-service provisions
• restoration rights.^[3][4][5]

A termination date is an employment event.

A forfeiture date is a plan event.

They can be different.

One Route Is Delayed Forfeiture After Five Breaks

Section 411 and the related regulations permit defined contribution plans to use break-in-service rules under which the nonvested pre-break employer benefit can be disregarded after the applicable sequence of breaks.^[3][5]

IRS describes the common rule this way: forfeiture of the nonvested amount can occur after five consecutive one-year breaks in service, subject to the applicable plan provisions.^[4][5]

Assume:

• employee terminates in 2026
• employee is 40% vested
• plan does not use an earlier cash-out forfeiture rule
• participant then incurs five consecutive one-year breaks in service

The nonvested portion can be forfeited under the plan's applicable delayed-forfeiture provisions.

The important point is timing.

The plan should not automatically date the forfeiture to the employee's 2026 termination if its written terms use a later event.

Another Route Uses Distribution of the Vested Benefit

Treasury regulations also permit a plan structure in which the nonvested employer-derived benefit is forfeited when the participant receives a qualifying distribution of the vested benefit, provided the plan includes the required restoration mechanism.^[3]

That creates an earlier forfeiture path.

Conceptually:

Termination → vested balance distributed → nonvested balance forfeited → restoration right preserved if the participant is rehired and satisfies the repayment rule

The plan document has to support that sequence.

It cannot simply accelerate forfeiture for administrative convenience.

A Zero Vested Balance Can Create a Deemed Distribution

A participant who is 0% vested in employer contributions can have no vested employer-derived amount to cash out.

The regulations permit specified deemed-distribution treatment when the plan contains the required provisions.^[3]

That can allow the plan to process a forfeiture before five breaks even though the participant did not receive an actual cash payment from the employer source.

Again, the plan language matters.

The administrator should not treat:

$0 vested employer balance

as automatic proof that the nonvested amount can be forfeited immediately under every document.

Early Forfeiture Comes With Restoration Rights

The tradeoff for the early cash-out approach is important.

When the plan forfeits the nonvested employer-derived amount based on a distribution of the vested accrued benefit, Treasury regulations require a restoration right under specified conditions.^[3]

If the participant returns and timely repays the qualifying distribution, the plan may have to restore the previously forfeited benefit.

That prevents the early-forfeiture mechanism from permanently destroying rights that the participant could regain after reemployment.

Example: Rehire and Repayment

Assume a participant has:

• total employer-derived account: $20,000
• vested percentage: 40%
• vested employer amount: $8,000
• nonvested amount: $12,000

The participant terminates.

The plan distributes the $8,000 vested amount and forfeits the $12,000 under a document provision that includes the required restoration rights.

Two years later, the participant is rehired.

If the participant satisfies the plan's valid repayment conditions within the permitted period, the plan may be required to restore the forfeited $12,000.^[3]

The forfeiture was real.

It was also conditional on the participant not exercising the restoration right.

Restoration Does Not Require the Old Forfeiture Dollars to Be Identifiable

The plan does not need to find the same securities or the same dollar bills that were originally forfeited.

Treasury regulations permit restoration in a defined contribution plan from sources that can include:

• plan income or gain
• forfeitures
• employer contributions.^[3]

The required restored employer-derived account generally cannot be less than the amount that was forfeited under the applicable restoration rule, without adjustment for subsequent gains or losses in the manner described by the regulation.^[3]

That makes restoration an accounting and funding obligation rather than a tracing exercise.

A Plan Can Delay Forfeiture Instead

The regulations also allow a defined contribution plan to avoid the forfeiture-and-restoration cycle by delaying the forfeiture until the repayment period expires, if the required conditions are satisfied.^[3]

That design produces a different operational result.

Immediate forfeiture approach

Nonvested amount moves to the forfeiture account earlier, but restoration may later be required.

Delayed forfeiture approach

Nonvested amount remains associated with the former participant until the applicable forfeiture event occurs.

Neither approach should be inferred from the recordkeeper's default workflow.

The document controls.

What Happens to Forfeited Money?

The participant no longer owns the forfeited amount.

But the money remains part of the qualified plan.

Under the Treasury and IRS proposed defined contribution forfeiture framework, the plan may provide for one or more of three principal uses:^[1]

1. pay plan administrative expenses
2. reduce employer contributions under the plan
3. increase benefits in other participants' accounts in accordance with plan terms

Those uses reflect longstanding defined contribution plan practice described by Treasury and IRS.^[1][7]

The specific plan has to authorize the use.

Forfeitures Can Reduce Employer Contributions

Assume the plan requires or the employer has decided to fund:

$100,000

of employer contributions.

The plan also has:

$20,000

of available forfeiture assets and permits forfeitures to reduce employer contributions.

The plan can use the forfeiture assets toward the employer contribution obligation in the manner allowed by the document.

The employer may therefore need to contribute only:

$80,000 of new cash

to satisfy a $100,000 contribution amount, subject to the exact contribution formula and plan terms.

The forfeiture money does not leave the plan.

It reduces the employer's new funding requirement.

Forfeitures Can Pay Plan Administrative Expenses

A plan document can also permit forfeitures to pay eligible plan administrative expenses.^[1][10][11]

Examples can include qualifying:

• recordkeeping
• accounting
• legal
• trustee
• other plan-administration costs

depending on the nature of the expense and the governing fiduciary rules.

The Department of Labor has expressly discussed plan designs in which administrative expenses are paid from forfeiture assets rather than from participant accounts or employer general assets.^[11]

That does not mean every business expense connected to employees becomes a plan expense.

The expense must be one the plan can lawfully bear.

Forfeitures Can Be Allocated to Other Participants

Defined contribution plans can also provide for forfeitures to increase other participants' accounts under the plan's allocation terms.^[1][7]

A plan might use a compensation-based allocation formula.

Another plan might integrate forfeitures into its existing employer-allocation method.

What it cannot do is let the employer decide informally:

"Give the forfeiture to these three employees this year."

A qualified plan needs a definite allocation method consistent with its written terms and nondiscrimination requirements.

Allocated Forfeitures Count Toward Section 415

A reallocated forfeiture can feel economically different from a new contribution because the employer did not deposit new money.

Section 415 does not care about that distinction.

IRS includes allocated forfeitures in annual additions.^[7]

For 2026, annual additions to a participant's defined contribution account are generally limited to the lesser of:

• 100% of applicable compensation, or
• $72,000

before qualifying catch-up contributions.^[7]

INV-099 covers that calculation in depth.

Example: Forfeiture Pushes a Participant Over Section 415

Assume a participant already has:

• regular elective deferrals: $24,500
• employer match: $15,000
• profit sharing: $29,000

Subtotal:

$68,500

The plan then reallocates:

$5,000

of forfeitures to the participant.

Annual additions become:

$73,500

That is above the 2026 $72,000 dollar ceiling before considering whether any amount receives separate catch-up treatment.^[7]

The fact that the $5,000 came from another participant's forfeited account does not create a Section 415 exception.

Forfeitures Can Potentially Fund QNECs and QMACs

A QNEC is a qualified nonelective contribution.

A QMAC is a qualified matching contribution.

These contribution types can be used in specified nondiscrimination testing and correction contexts.

Older rules created an obstacle to using forfeitures because QNECs and QMACs had to satisfy nonforfeitability conditions at an earlier point.

The 2018 final regulations changed the definitions so that employer contributions can qualify as QNECs or QMACs if they are nonforfeitable when allocated to participant accounts.^[6]

That allows forfeiture assets to be used for QNECs or QMACs when:

• the plan document permits the method
• the allocation satisfies the applicable rules
• the amount is fully vested when allocated
• the remaining QNEC or QMAC requirements are met.^[6]

A forfeiture balance is therefore potentially useful in correction.

It is not automatically a QNEC.

The Plan Document Determines the Permitted Uses

A plan can permit all three principal forfeiture uses.

It can also be written more narrowly.

That flexibility creates a practical risk.

Suppose the document says forfeitures can only pay administrative expenses.

The plan generates:

$25,000

of forfeitures.

Available qualifying administrative expenses are only:

$10,000

If the plan is operating under the proposed 12-month framework, the remaining:

$15,000

creates a problem because the document provides no second permitted use.

Treasury used essentially this structure in explaining why plans may want more than one permitted forfeiture use.^[1]

A narrow document can create an operational bottleneck.

The IRS 12-Month Rule Is Still Proposed in 2026

This point needs precision.

Treasury and IRS proposed regulations in 2023 that would generally require a defined contribution plan to use forfeitures no later than:

12 months after the end of the plan year in which the forfeitures are incurred under plan terms.^[1]

The proposal was written with a plan-year applicability date beginning in 2024.

But as of 2026, the regulation has not been finalized.

IRS Notice 2026-34 still identifies the forfeiture rules as proposed regulations and states that taxpayers may rely on them before final regulations become applicable.^[2]

So the accurate 2026 statement is:

The 12-month rule is a proposed regulatory framework on which taxpayers may currently rely.

It should not be described as a final Treasury regulation.

Why the Proposed Rule Matters Anyway

"Proposed" does not mean irrelevant.

The proposal:

• reflects Treasury and IRS's current intended framework
• provides a clear permitted-use structure
• provides a measurable deadline
• includes a transition rule
• can be relied on before final regulations become applicable.^[1][2]

Plans should therefore know whether they are administering forfeitures consistently with that framework.

But an article, plan memo or compliance checklist should still label the legal status correctly.

The Proposed Deadline Starts When the Forfeiture Is Incurred Under Plan Terms

The proposed rule does not simply say:

12 months after termination.

It refers to the plan year in which the forfeiture is incurred under plan terms.^[1]

That distinction matters.

Suppose:

• employee terminates in 2026
• plan delays forfeiture until the fifth consecutive break in service
• forfeiture is not incurred under the document until a later plan year

The proposed 12-month use period would be tied to that later forfeiture year, not automatically to 2026.

The administrator first needs the correct forfeiture date.

Then it can calculate the proposed use deadline.

Old Forfeiture Balances Received a Proposed Transition Rule

The 2023 proposal also contains a transition rule for forfeitures incurred in plan years beginning before January 1, 2024.^[1]

Under the proposed transition approach, those older forfeitures are treated as incurred in the first plan year beginning on or after January 1, 2024 for purposes of the proposed deadline.

The purpose is straightforward:

prevent old suspense-account balances from escaping the new timing framework merely because they arose before the proposal's intended applicability period.

Because the rule remains proposed in 2026, the transition provision should also be described as proposed rather than final.

Indefinite Forfeiture Suspense Accounts Are a Bad Operating Model

Treasury noted that IRS had already warned plans against allowing forfeitures to accumulate over multiple years in a suspense account.^[1]

The 2023 proposal attempted to replace less precise timing concepts with one defined 12-month period.

Even before final regulations arrive, a large stale forfeiture balance should trigger review.

Questions include:

• Why was the amount not used?
• When was each forfeiture incurred?
• What uses does the plan document permit?
• Are restoration liabilities being tracked?
• Does the balance include amounts that should not have been forfeited?
• Has a correction contribution or QNEC been funded incorrectly with the account?
• Has a proposed deadline been missed under the plan's chosen reliance position?

A forfeiture suspense account should be reconcilable participant by participant and year by year.

A Forfeiture Is Not a Refund to the Employer

When a plan uses forfeitures to reduce employer contributions, the employer may benefit economically because it contributes less new cash.

That does not mean the plan wires the forfeiture balance to the employer's operating account.

The assets remain subject to plan rules.

The distinction is:

Reduce employer contribution

Use existing plan forfeiture assets to satisfy part of a contribution that otherwise would require new employer funding.

Refund employer

Remove plan assets and return them to the employer.

Those are not the same transaction.

Plan fiduciaries must act for the exclusive purpose of providing plan benefits and defraying reasonable plan expenses, follow plan documents and satisfy the other fiduciary duties that apply.^[9]

Does a Plan Have to Use Forfeitures for Expenses First?

No blanket federal rule says every 401(k) forfeiture must be used for plan expenses before it can reduce employer contributions.

This issue has generated litigation.

In January 2026, the Department of Labor publicly stated its position that there is no per se ERISA rule barring a fiduciary from choosing to use forfeited employer contributions to reduce future employer contributions rather than offset administrative expenses.^[10]

That does not make the decision consequence-free.

The administrator still has to consider:

• the plan document
• fiduciary authority
• prudence
• loyalty
• applicable expense rules
• the facts of the plan.^[9][10]

But the simplistic rule:

"Forfeitures must always pay participant expenses first"

is not the Department's stated 2026 position.

Permitted Tax Treatment and Fiduciary Process Are Different Questions

A use can be permitted under the tax qualification framework and still involve a fiduciary decision.

For example, assume the plan document allows forfeitures to:

• pay administrative expenses
• reduce employer contributions

Tax qualification rules can permit both routes.

The fiduciary question is:

Who has discretion to choose between the routes, and how must that discretion be exercised under ERISA?

The plan document and fiduciary structure matter.

This is another reason not to treat the forfeiture account as employer cash.

Full Plan Termination Can Eliminate a Potential Forfeiture

When a 401(k) plan terminates, affected participants generally must become 100% vested in accrued benefits.^[8]

That can convert an amount that looked nonvested immediately before termination into a fully vested participant benefit.

Assume:

• participant employer account: $20,000
• vested percentage under ordinary schedule: 40%
• potential nonvested amount: $12,000

If the participant is an affected participant in a plan termination and full vesting is required, the $12,000 is not available to be forfeited merely because the participant had not completed the ordinary vesting schedule.^[8]

The termination rule overrides the normal vesting result for affected participants.

Partial Terminations Can Create the Same Issue

A partial plan termination can also trigger full vesting for affected participants.

That means an administrator reviewing a year with significant workforce reductions should not process all nonvested terminated-participant balances as routine forfeitures before checking partial-termination consequences.

The order matters:

1. determine whether full or partial termination rules apply
2. identify affected participants
3. apply required vesting
4. calculate any remaining valid forfeiture.

Otherwise the plan can forfeit money that had become nonforfeitable.

A Vesting Error Produces a Forfeiture Error

Assume a participant actually has:

4 years of vesting service

but the recordkeeper has only:

3 years

If the plan uses a graded vesting schedule, the wrong service record can create:

• wrong vested percentage
• wrong distribution
• excessive forfeiture
• incorrect forfeiture account balance.

IRS identifies service-record and vesting errors as a recurring plan problem.^[4]

A forfeiture reconciliation is therefore only as reliable as the vesting data beneath it.

Rehire Data Is Just as Important

A former participant can return before the forfeiture is final under the plan's rules.

Or a prior cash-out forfeiture can create restoration rights.

The employer should retain enough historical data to identify:

• prior employment dates
• prior vesting service
• distribution amount
• date of distribution
• amount forfeited
• break-in-service history
• rehire date
• repayment deadline
• repayment amount
• restored employer-derived balance.

A new payroll hire date should not erase the retirement plan's history.

INV-096 covers rehire and break-in-service rules in depth.

Example: $12,000 Potential Forfeiture

Assume:

Employer contribution account:

$20,000

Vesting percentage:

40%

Vested benefit:

$8,000

Nonvested portion:

$12,000

The participant terminates.

If the plan uses delayed forfeiture

The $12,000 may remain associated with the participant until the applicable break-in-service event.

If the plan uses qualifying distribution-triggered forfeiture

The plan can distribute the vested $8,000 and process the $12,000 forfeiture if its document contains the required provisions, including applicable restoration rights.^[3]

Same employee.

Same vesting percentage.

Different forfeiture timing based on the plan document.

Example: Forfeiture Account Used for Two Purposes

Assume the plan has:

$30,000

of available forfeiture assets.

The document permits:

• payment of administrative expenses
• reduction of employer contributions

Eligible plan administrative expenses:

$8,000

The administrator uses $8,000 of forfeitures for those expenses.

Remaining forfeiture balance:

$22,000

The plan then uses the $22,000 to reduce an employer contribution otherwise requiring new cash.

That multi-use design can make it easier to exhaust forfeiture balances within the timing framework contemplated by the proposed regulations.^[1]

Example: Reallocation to Participants

Assume a plan reallocates:

$24,000

of forfeitures among six eligible participants under its written formula.

One participant receives:

$4,000

That $4,000 is an allocation to the participant's account and generally enters the participant's Section 415 annual-additions calculation.^[7]

The plan still has to apply:

• the written allocation method
• applicable compensation rules
• nondiscrimination rules
• Section 415.

"Forfeiture" describes the source of the money.

It does not exempt the allocation from the rules that apply to money entering another participant's account.

Example: Plan Allows Only Expense Use

Assume:

• plan permits forfeitures only for administrative expenses
• annual forfeitures: $25,000
• available administrative expenses: $10,000

Under the proposed IRS framework, the remaining $15,000 cannot simply sit in the forfeiture account beyond the proposed use deadline.^[1]

Treasury specifically identified this kind of problem.

A plan amendment expanding permissible uses can be part of the prospective design solution, but the sponsor should not retroactively invent a use that the document did not permit when the forfeiture arose.

Operational correction and document amendment are separate questions.

The Forfeiture Account Reconciliation

For every amount in a forfeiture account, identify:

A single forfeiture-account total is not enough.

The plan needs a transaction history.

The Four Questions That Prevent Most Forfeiture Errors

1. Was the amount actually forfeitable?

Confirm vesting, contribution source, plan-termination status and employee history.

2. When was it forfeited under the document?

Do not substitute termination date for forfeiture date.

3. What can the plan legally do with it?

Read the forfeiture provisions rather than relying on recordkeeper defaults.

4. Was it used and tracked correctly?

Check timing, participant allocations, Section 415, expenses, restoration obligations and remaining balances.

If one of those questions is skipped, the forfeiture account can become an accumulation of old mistakes rather than a valid plan asset.

Frequently Asked Questions

Do I lose my own 401(k) contributions if I leave before vesting?

Ordinary employee elective deferrals are fully vested. Vesting schedules generally apply to specified employer contribution sources, not the employee's own salary deferrals.

Does my employer get my unvested match back?

The participant can lose the nonvested employer amount, but the forfeited assets stay in the plan and must be used under the plan's permitted forfeiture provisions.

Is the forfeiture date always my termination date?

No. The plan can use different forfeiture timing structures, including delayed forfeiture after applicable breaks or earlier forfeiture connected with distribution or deemed distribution of the vested benefit when the required provisions exist.^[3][4]

Can forfeitures pay 401(k) expenses?

Yes, when the plan permits payment of eligible plan administrative expenses from forfeitures and the expense is one the plan may properly bear.^[1][11]

Can forfeitures reduce the employer match or profit-sharing funding?

A plan can permit forfeitures to reduce employer contributions under the applicable framework.^[1]

The exact employer contribution being reduced must still be determined under the plan.

Can forfeitures be given to current employees?

A defined contribution plan can provide for forfeitures to increase other participants' accounts under its written allocation terms.^[1]

Allocated forfeitures generally count toward Section 415.^[7]

Can forfeitures be used as QNECs or QMACs?

They can potentially be used when the plan and the applicable QNEC/QMAC requirements are satisfied, including nonforfeitability when allocated.^[6]

Is there a 12-month forfeiture deadline?

Treasury and IRS proposed a rule generally requiring use no later than 12 months after the end of the plan year in which the forfeiture is incurred under plan terms.^[1]

As of 2026, that rule remains proposed rather than final. IRS states that taxpayers may rely on the proposed regulations before final regulations become applicable.^[2]

Can a forfeiture account carry a balance?

A temporary balance can arise as forfeitures are generated and later used.

Indefinite accumulation without a document-supported and timely use is a compliance concern. The proposed regulations would formalize a 12-month use period.^[1]

What happens if I am rehired?

Rehire can matter materially. Depending on the plan's forfeiture structure and whether a prior distribution is repaid within the permitted period, a previously forfeited employer-derived benefit may have to be restored.^[3]

What if the plan terminates after I leave?

Affected participants in a full or partial plan termination can be entitled to full vesting, which can eliminate a forfeiture that otherwise would have occurred.^[8]

The ROIStreet Forfeiture Test

For any forfeiture, run the analysis in this order:

Contribution source → vesting percentage → termination and service history → distribution or deemed distribution → forfeiture date under the plan → restoration rights → permitted use under the document → proposed timing framework → Section 415 if reallocated → fiduciary process → final reconciliation

The most common shortcut is starting with:

"The employee quit, so this money is forfeited."

That can be wrong on both timing and amount.

A forfeiture is valid only after the plan correctly determines what the participant did not own, when that right was lost and what the plan is authorized to do with the resulting asset.

Sources & References

1. Internal Revenue Service / Treasury: REG-122286-18 — Use of Forfeitures in Qualified Retirement Plans — https://www.irs.gov/irb/2023-11_IRB
2. Internal Revenue Service: Notice 2026-34 — 2026 Cumulative List of Changes in Plan Qualification Requirements — https://www.irs.gov/pub/irs-drop/n-26-34.pdf
3. Electronic Code of Federal Regulations / Cornell LII: 26 CFR §1.411(a)-7 — Definitions and Special Rules — https://www.law.cornell.edu/cfr/text/26/1.411%28a%29-7
4. Internal Revenue Service: Fixing Common Plan Mistakes — Vesting Errors in Defined Contribution Plans — https://www.irs.gov/retirement-plans/plan-sponsor/fixing-common-plan-mistakes-vesting-errors-in-defined-contribution-plans
5. Internal Revenue Service: Improper Forfeiture by Defined Benefit Plans — https://www.irs.gov/retirement-plans/improper-forfeiture-by-defined-benefit-plans
6. Internal Revenue Service: Plan Forfeitures Used for Qualified Nonelective and Qualified Matching Contributions — https://www.irs.gov/retirement-plans/issue-snapshot-plan-forfeitures-used-for-qualified-nonelective-and-qualified-matching-contributions
7. Internal Revenue Service: 401(k) and Profit-Sharing Plan Contribution Limits — https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits
8. Internal Revenue Service: 401(k) Plan Termination — https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-termination
9. Internal Revenue Service: Retirement Plan Fiduciary Responsibilities — https://www.irs.gov/retirement-plans/retirement-plan-fiduciary-responsibilities
10. U.S. Department of Labor: DOL Amicus Position on Fiduciary Use of Forfeited Funds — https://www.dol.gov/newsroom/releases/ebsa/ebsa20260130
11. U.S. Department of Labor: Field Assistance Bulletin 2012-02R — https://www.dol.gov/agencies/ebsa/employers-and-advisers/guidance/field-assistance-bulletins/2012-02r

Educational Disclaimer

ROIStreet publishes educational content about retirement-plan vesting, forfeitures and plan administration. This article is not legal, tax, fiduciary, accounting or plan-administration advice. Forfeiture timing and use depend on the written plan, contribution source, vesting schedule, distribution history, rehire status, break-in-service rules, plan termination status, fiduciary authority and current IRS, Treasury and Department of Labor guidance.

The ROIStreet Reader Promise

We strive to explain before we evaluate, present evidence before opinions, discuss risks alongside potential benefits, distinguish facts from analysis, and correct material errors transparently.

Our purpose is to help readers better understand investing—not to tell them what to do.