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Could it be that the truth is in this typo?

I've heard that before -- and I agree that it is totally unacceptable. I don't remember now who it was, but apparently they prioritize their testing according to plan size. If I were the sponsor of a small plan, I would be looking for a new recordkeeper ASAP.

Totally unacceptable. Run!

If the sponsor does not want to change to daily valuation, ask if they want to change to quarterly. If so, then make sure you can get whatever information you need on that basis. Not a perfect solution, but it avoids the pitfalls of a "special valuation".

I know what is going on here. The Plan is unprofitable and they actually hope you will leave.

The service agreement between the sponsor and the provider should be examined closely.

An absolute disgrace. "We're going to charge you for a service that we won't perform in a timely fashion, and we're going to make you responsible for any adverse consequences that occur because we didn't timely perform the services for which we charged you in the first place..." How do these people sleep at night?

2 years of service.

I'm not sure this isn't splitting hairs. I'm not sure how the plan reads and don't have access to a BPD at the moment. I would begin with the following premise and then see if the plan's language contradicts it (remember interpretations must merely be reasonable; or not arbitrary and capricious): The plan limits deferrals as a certain percentage of Compensation (i.e. 100% or lower). Compensation is defined to exclude certain amounts. At year end, eligible Compensation for deferral purposes is $18,000. The participant deferred $18,000. What's the problem? You're interpreting the plan to say that you cannot actually defer dollars from amounts that are from those sources (i.e. Overtime). Would it be reasonable to say deferrals are limited to eligible Compensation for the year (and eligibile Compensation merely excludes those amounts?) It's basically applying the same methodology for making deferrals after your Compensation actually exceeds the 401(a)(17) limit. Again, I don't have current access to a document and asking if this would be a reasonable interpretation of the way your plan is written. Also, verify who has the responsibility for interpreting the plan's provisions. Good Luck!

If the distribution form(s) (ie, the form already sent to participant) discloses the IRA, then you (probably) don't have to give participant any additional notice. But if the distrib. form does not mention the IRA default, additional communication might be advisable (even if not required). There might be value in doing so, because it may spur the participant to action.

Years ago, we had a few annual balance forward plans that the plan administrator/trustee set some amount that if the distribution was more, then either wait till the next valuation, do a partial distribution, or do a special valuation. So if the distribution was more than, say 10% of total plan assets, one of the 3 options would be used... or if the distribution was less than, say 10% of total plan assets, the distribution was paid based on the last valuation. The percentage of total plan assets, and the options to be used, were decided by the plan administrator and applied consistently for the plan.

What you describe was normal back when balance forward was the norm. Back then most people figured it would all equal out in the end. Some year there were gains and some years a loss so the effect pretty much was a wash over time for everyone. The hard part was years like 2008 and the plan allowed in-service distributions. I had a balance forward plan that was annual and allowed for in-service distributions. People started figuring out that they could get their 12/31/2007 balance out in Oct of 2008. There was a run on the bank. They were just forced to amend the plan to stop such things by making it quarterly valuation and you couldn't get paid an in-service until after the next quarterly work was done. It is why people moved to daily once technology made it practical and affordable as others are saying.

Yes. For my stacked match plans I calculate the exact percentage for the fixed match and simply amend year by year as needed.