Non-vested matching amounts associated with excess deferrals must be forfeited, what are these called?

The term used for non-vested matching amounts associated with excess deferrals is "hanging/orphan matches." This refers to matching contributions that are not vested and may remain with the plan if they are not tied to the participant's actual contributions. When employees exceed the contribution limits, any associated non-vested matching amounts will be forfeited, which is a critical compliance aspect in managing 401(k) plans.

Understanding the concept of "hanging/orphan matches" is essential as it highlights the implications of excess deferrals on matching contributions, which ensures plan participants and administrators comprehend the vesting schedule and forfeiture policies. This term emphasizes the situation where the matching contributions exist but are not owned by the participant due to the lack of vesting, particularly in the context of regulatory compliance.