How do we handle forfeiture of flex spending funds?

Q. I have a question about forfeture of flexible spending account funds. We have unused contributions remaining after deducting our administrative fees from 2009 and 2010. We're being advised by our TPA that we have two options for disbursement. 1) Use the "Net Gain" to reduce required premiums for 2011 for 2011 participants, or 2) Return the forfeitures in cash to all 2011 participants equally via a payroll taxable bonus. We are uncomfortable with these options and would prefer to hold in the account to offset possible losses in future years. Can you please provide us with your legal opinion? – Jill, New York