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Plan terminated. Assets distributed. Then.....


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Non safe harbor 401k plan...

Plan was terminated and the assets were distributed during 2015. Later, it was discovered that one participant did not receive a profit sharing/matching contribution (between $1,000-$2,000).

The participant's account balance was rolled over to a new employer's 401k plan upon plan termination.

What is the best way to provide the missing contribution to the participant? I think it is best to have the plan sponsor write a check directly to the participant's new employer's plan as a rollover. The contract between the plan sponsor and the financial institution where the plan's assets were invested was completely terminated upon asset liquidation. So, there is no way to physically deposit the contribution to the participant's old 401k account.

Also, how should it be reported on the final 5500-SF (or maybe it is not final 5500 because it will have a receivable/ending balance for the amount of the missing contribution)?

Lastly, would the earnings calculation be required? Profit sharing was a discretionary (once a year deposit), and the matching was a discretionary per payroll calculation/deposit.


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