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I still don't understand the problem. If I take a bona fide participant loan, complete with appropriate paperwork, there is an obligation to repay the plan. If someone chooses to make the payments for me (my parents, employer, friends, children, The Halfway House for Wayward TPA,s, whatever) what difference does it make? The plan is whole, and the repayment obligation is satisfied. Now, the fact that someone is essentially giving me a gift may possibly have other implications for the gift giver, or perhaps under some circumstances there may somehow be taxable income to me - that's another issue, and I have no opinion on that, but I don't see how there is any PLAN problem.

David, in my opinion, that is a 'red herring'. The participant did reach Benefit Commencement Date as evidenced by the signing of the benefit forms. The fundamental question is - does the difference in timing between 'click' and 'bang' change the target? And I think not.

I wouldn't want to be the one making tax decisions and consequences based solely on an employees wages. You never know what their 1040 income looks like in other earnings/spouse's earnings etc. I think it is a flawed reasoning personally to guess that they generally don't pay any federal income tax. To me, this is too close to giving tax advice. But I don't tend to like auto-enroll although I've done enough non-discrimination testing in my lifetime to understand the purpose.

That's interesting. But how do you file when there is no Plan Sponsor. I think my position will be just because you sign a Plan Document doesn't mean you have created a plan. Pretend there is a sponsor? And then sign, subject to perjury, that it is true, correct and complete? I think the rule about when you "find yourself digging yourself into a hole, stop digging" applies.

As the self-appointed "finder of the real problem" this may be your problem. Payroll departments, and payroll companies, routinely screw up retirement plan matters. They probably have something buried in their system that needs to be fixed - after they talk to someone who understands retirement plans.

You say "one company ended their SIMPLE plan." That can't be done in the middle of the year. https://www.irs.gov/retirement-plans/terminating-a-simple-ira-plan

I'm not entirely sure I follow what you are proposing. Are you proposing that the participant write an additional check to the plan, that won't be deferred from current or future salary? So his salary for the rest of the year is $4,000, and he wants to put $5,000 into the plan, so he writes a check out of his checking account for $1,000? If so, answer is no. As to "retroactive" deferrals, no, there is no such thing.

I can't see how you would reasonably justify stopping the distribution once decisions were made & signed paperwork was sent. You can't "un-ring the bell" as they say.

I think she gets the match on the "extra" $150 deferral. The fact that she deferred $200 on the 4th payroll doesn't "fix" the problem of the actual missed deferrals. The participant may be in the same place after her "fix", but the fact of the matter is that the plan still failed to follow the deferral election. Say another participant actually deferred $50 for the first 3 payrolls, $200 for the 4th payroll, and back to $50 thereafter. They both should get the same match. ??

It was only a new plan once; would the advisor think it's a new plan after 9, 10, 12 15 months of being in existence? Your instincts are correct that you can't reduce someone's vested percentage, but you can make those participants grandfathered into the old schedule where all of their service gets counted. I wonder how many days the plan has to exist before the financial advisor does not consider it a "new" plan. In fairness, Financial Advisor generally doesn't encompass the minutiae of 401k plan rules, but his 401k recommendations should be filtered through a 401k administrator before being effective. The fact that the new TPA made the change makes me think that maybe they did it on a pro-active basis, where current participants were not affected.