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Perhaps some 401k was deposited in January 2015 that was actually a 2015 contribution

I agree that recordkeepers are better at it, and that plan sponsor's don't want to do it. However it is ultimately the plan sponsor who is on the line for the information. If they have changed recordkeepers, it is going to be incredibly difficult to produce the records.

Are you sure you can't find another way to use the $496, e.g. as a profit sharing contribution? If it is for him, it gets deducted on the same place (1040).

Two things that come to mind to check in the service agreement are who has what liability if the records cannot be produced for the auditor, and whether the complete set of records will be transferred when you hire a different record keeper. Personally, I'd get copies for the plan sponsor's files, but that's just me.

I guess there can be differences of opinions as to what "administratively feasible" means. I think if the VCP filing could result in a DECREASE of the participant's account balance, there may an issue of "protecting plan assets" and the known difficulty of trying to get overpayments returned. But if the VCP filing could only INCREASE the participant's balance, then what is the impediment to a secondary distribution? An initial distribution of a known balance is easy. A secondary distribution of a corrective contributions is likewise "easy." Last I checked, the "cost" of doing a secondary distribution is irrelevant in the decision. If it was the plan sponsor's error, it is the plan sponsor's burden to make it right. The "best" approach (IMHO) is to follow normal plan procedures and precedence in processing the distribution, and if necessary, make a secondary distribution AFTER the VCP correction has been made - especially if that determination may be months, if not many months into the future.

We received the same Colonial Surety e-mail. According to their e-mail, the DOL reviewed and approved their advertising copy that includes a prominently placed DOL logo. My BS meter broke before I got all the way through the e-mail. I'm also curious if anyone can confirm an actual DOL e-mail.

The plan says to pay out after separation from service "as soon as administratively feasible." I don't think a pending VCP filing that may ultimately affect the account balance is a justification for not proceeding with the distribution. I am just curious what others think and whether anyone knows of guidance on this point. It seems to me this would be a common occurrence (i.e. distribution events during VCP) and that employers probably don't discontinue all distributions during a VCP that may last for several months.

Even if the plan allows for delay of RMD until year of retirement the RMD is still required in that year for the rank and file participants.