In February, the IRS proposed changes to forfeiture rules for defined benefit and defined contribution plans. The comment period has now ended, and the changes should be finalized soon.

The proposed regulations would “clarify that forfeitures arising in any defined contribution plan (including in a money purchase pension plan) may be used for one or more of the following purposes, as specified in the plan: (1) to pay plan administrative expenses, (2) to reduce employer contributions under the plan, or (3) to increase benefits in other participants’ accounts in accordance with plan terms.”