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Sorry, there is no doubt in my mind that the payroll provider is deficient. If they can't do the comp limit or limit the max 401(k) deferral, they need to replaced with a payroll provider that can. I am not talking about legal responsibility here. But the error should not happen in the first place, and it is with the payroll provider that the error first happens. In our operation, we would double check the match against the comp and find this error, and then we would tell the client to change payroll vendors if the vendor can't comply. Simple.

You're going to file the form; it's going to show a deficiency in the computers of 21 cents. Why play games? Send the check for the 21 cents. Or would you rather have to deal with corresponde where the postage alone will be more expensive????.

I doubt it exists; the fact pattern immediately prior says or at least implies that all of this happened after the original trustee died. If the new company adopted and maintained the plan as its own, then I agree with Bill Presson. The new owner should be able to name himself as trustee and it sounds like he did. I understand that it's a little fugazy with a new entity maintaining what was another entity's plan but they'll have to get over it. I'd ask the bank "exactly what 'proper' paperwork do you want and we'll get it" (short of having the dead guy sign something...).

I'm thinking it was a sole prop and what was bought was assets and the plan was not dealt with, so it is still "owned" by the estate. Query: was this a stock sale or an asset sale when the employees bought it? If the latter, I can see why it's a problem.

I think that the underlying technical issue is that under long-standing case law, a taxpayer cannot "turn his/her back" on income, from any source, without being in "constructive receipt" of the income (i.e., it's included in his/her gross income). Receiving the check and not cashing it is "turning your back on income" if you understood that what you had received in mail was a check. Although the plan administrator would, almost certainly, have no way of knowing, arguably you would get a different result if the taxpayer had moved and did not get the check, or if he or she had thrown it away without opening the envelope, not realizing a check was inside (which might be impossible to do, depending on the envelope).

No. Give it now and you are fine.

Unless the TPA/RK or the payroll vendor is a plan fiduciary, they have no liability or responsibility for doing anything other than what the Plan Administrator tells them to do.

Answer to the question in the title is: Plan Administrator.

The plan can start 10/1. The SHN should be distributed within a reasonable period before the beginning of the plan year. If the plan is established on 9/25, is it reasonable to distribute the SHN 25 days before the plan was even established? Larry and Kevin are both correct. You have until 10/1 to start the plan and 30-90 day period for the SHN is when it is deemed reasonable. If you establish the plan during September and don't drag your feet on the notice, you are fine. Personally, I wouldn't rush to crank anything out. Let it take the time it takes to make sure nothing is missed. There is nothing worse than rushing something out and having come back to bite you because you overlooked something. Call FTW support and ask to speak to the document department. They have excellent people there and they are very quick to call back if they are not available.

The SH notice is required to be provided a reasonable period of time before the beginning of the plan year. 30-90 days before is deemed to be a reasonable period of time. For less than 30 days, it's a facts and circumstances determination. See 1.401(k)-3(d)(3).

You can't fail testing if there are no HCE's. In a DC plan, with no HCEs, you could have each participant in their own group and only contribute for one person and you would be fine.