Final answer:
Plan forfeitures are commonly re-allocated in defined contribution plans like 401(k)s and 403(b)s, which are portable, tax-deferred, and protect against inflation.
Step-by-step explanation:
Plan forfeitures can be re-allocated in defined contribution plans, such as 401(k)s and 403(b)s. Under these plans, both employers and employees contribute a fixed amount to the retirement account, which is then invested. Certain conditions like an employee leaving before vesting may lead to forfeiture of non-vested amounts. These forfeitures can then be used to reduce future employer contributions or to increase the plan benefits for the remaining participants. Unlike traditional pension plans, these defined contribution plans offer portability and are tax-deferred, which helps protect retirees from inflation.