Common use of Correction Methods Clause in Contracts

Correction Methods. (a) Contri- bution Correction Method. A failure in a defined contribution plan to apply the proper vesting percentage to an employ- ee’s account balance that results in forfei- ture of too large a portion of the employ- ee’s account balance may be corrected using the contribution correction method set forth in this paragraph. The employer makes a corrective contribution on behalf of the employee whose account balance was improperly forfeited in an amount equal to the improper forfeiture. The cor- rective contribution is adjusted for earn- ings. If, as a result of the improper forfei- ture, an amount was improperly allocated to the account balance of another employee, no reduction is made to the account balance of that employee. (See Example 11.)

Correction Methods. (a) Contri- bution Correction Method. A failure in a defined contribution plan to apply the proper vesting percentage to an employ- eeem- ployee’s account balance that results in forfei- ture forfeiture of too large a portion of the employ- eeemployee’s account balance may be corrected cor- rected using the contribution correction method set forth in this paragraph. The employer makes a corrective contribution contribu- tion on behalf of the employee whose account balance was improperly forfeited for- feited in an amount equal to the improper im- proper forfeiture. The cor- rective contribution corrective contri- bution is adjusted for earn- ingsearnings. If, as a result of the improper forfei- tureforfeiture, an amount was improperly allocated to the account balance of another employee, no reduction is made to the account balance bal- ance of that employee. (See Example 11.)