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"Long story short, the actuarial was unable to accurately anticipate the aggressive nature of our client's investing and currently has a nearly $1mm overfunding situation." This is my favorite line. Your client didn't listen to the actuary and it's the actuary's fault.

Yep. It happens all the time. This is why every class, conference session, and webinar make a point of reminding you that there is no de minimis amount when it comes to late deferrals. Or maybe because its the law? :) Why? The rules have to be followed to the letter anyway, so it should be easy to just notify the participants that he has done what he is supposed to do. He is lucky they didn't bring it to the DOLs attention and have them enforce the rules instead of giving him the chance to clean up his own mistakes. This is not unusual. Hopefully it will be a valuable lesson to the client to make an effort to make timely deposits rather than clean them up later. And honestly, its hard to feel bad for him when he only got 25% of his payroll deposits in timely and some were up to 6 weeks late... When it comes to corrections I want transactions into a plan account so that I have a clear paper trail that the corrections were done. You could establish a checking account for the plan outside of the platform provider and have the amounts deposited there, then cut checks from that account. Or make the corrections to the platform and transfer to the checking account. Any distribution fees should be paid by the client, not the participants.

As Luke pointed out, there is no requirement that a plan have a determination letter or reliance on a pre-approved plan. If it's a leveraged ESOP, then the lendor might require IRS approval. Regardless, it's standard practice to get IRS approval. Also note that there are no pre-approved ESOPs yet. Those were only recently allowed - submisstions were made by 12/31/18 and we don't know how long it will take for the IRS to approve them. Best guess is in 2020 based on some informal comments from the IRS.