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Is it April Fool's Day? I would allocate losses, or tell the recordkeeper to wipe out the accounts, or whatever it took to not look at them or think about them for more than a second. It is indeed either a document design flaw as ETC notes, or an operational flaw (as in, someone should not have let this happen in the first place).

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I have looked into this question before and there is no de minimis rule for paying benefits. No matter how small the law says you have to pay them. Now if the plan has in the past charged a distribution fee which would exceed this a case can be made the fee takes up the payment and the person gets nothing. But if you are looking for a rule that says you don't have to make a payment of small amounts it doesn't exist. As a practical matter I don't know how much trouble you would get by not paying it. I know I have had plans where the PA was willing to risk it and we wrote off the balance but the law does not say that can be done.

Which is generally why I design plans to have forfeitures pay plan expenses and used to reduce employer contributions. This, to me, it a plan design failure; especially if the plan is being billed based on the number of participants with accounts. The plan just got billed for 3 participant accounts that total $0.15 in assets. Whatever you decide, these accounts should be closed; even if you have to cut a check for $0.01. You should also consider potential changes in the plan design that would prevent this from happening again in the future. Good Luck!

Anyone who says the employer has discretion in providing the plan document in some form upon request is setting the employer up for a DOL audit and the $110/day penalty (or whatever the penalty is now) for refusing to provide ERISA-protected right to requested documents. This is CUT and DRIED.

This is where we usually tell people to ask those sources to come up with a cite for their position. Of course they can't because they are wrong. As Mike notes, it might be confusion about how to provide the notice. But the Adoption Agreement should be a fairly short document and I recommend it be provided without further delay.

I think in Shakespeare's story McDuff kills MacBeth because of the insistence of working on a plan that had eligibility like that. guess Pmacduff wants to continue that? At least the line "Double, double toil and trouble; Fire burn, and cauldron bubble." implies such headaches! (hey, it's Friday, best I can do on the spur of the moment.)

You have the basic idea, but as ESOP notes, it is the details where you need to be careful, and which makes it impossible for us here to answer your question as a yes or no. Many people misunderstand the 20% - the 20% is not the TAX, per se, but is simply WITHHOLDING. So when you ultimately file your tax return, this 20% withholding will either mean you get a bigger refund, or owe less. The 20% withholding doesn't exist in a vacuum.

ok, I'll reveal my ignorance here (won't be the first or last time), but in my own defense it's been quite a few years since I've dealt with plan document issues... wouldn't it have been easier/simpler just to amend and restate into Fidelity's plan, and have Fidelity request an asset transfer from Vanguard as successor trustee?

i hate to be a pain in the rear on this, but this is really technical legal stuff that has to do with the structure of the transaction, as well as the language of the Plan. Someone needs to evaluate the transaction paperwork to identify what really happened in the transaction and then determine how the plan is affected. This should not be determined through a discussion peppered with assumptions. Just sayin' ....