Question

How can forfeitures be used in a defined benefit plan?

How can forfeitures be used in a defined benefit plan?

Homework Answers

Answer #1

Defined benefit plans are the retirement benefits that the company provides to its employees. It is a defined contribution made to the retirement plans of the employees. Forfeitures are unearned benefits. This includes the benefit that an employee should receive due to the length of the time period that he has worked in the company. The defined benefit plans include these forfeitures. They can be included as follows: By reducing the employer's future contribution in the defined benefit plans.

By paying reasonable plan expenses.

By allocating additional contribitions among the employees.

By restoring the amount in the accounts of the previously forfeited accounts.

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