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Of course this can't be done...I'll go out on a short limb and add "period." Salary deferrals must be withheld from pay. How is land withheld from pay? Well now you're saying the match is the land contribution; that's slightly different...still not possible. I agree that it's a PT. (Even if possible somehow, for tax purposes, it would be treated as a sale of the land, and that's almost certainly what they think they are getting away from.) I'd venture that this is just a typical fugazy idea that needs to be nipped in the bud. It's usually not wise to have a corp. own land, so they probably have either gotten bad advice or done things on their own with no advice in the past. Your value added is in telling them "no."

Read the Plan documents. There should be coordinating language that explains how the top-heavy minimum requirements are met.

It seems you have it correct, $42 per month is is $504, since that is under the stated limit of $1,000 you should receive an annual match of $252. It does not say if the match is calculated and deposited each payroll or at the end of the year in a single deposit. On the other hand if you were contributing $420 per month that would be $5,040 for the year. Since that exceeds the maximum $1,000 that is matched the annual match would be capped at $500. In addition it appears that an annual contribution is made that varies based on pay and years of service with the company. This is only a brief summary and the legal plan document and summary plan description might contain additional information that could effect eligibility and amounts.

Is the TPA a fiduciary to the plan in any way? Does their service agreement basically say that the TPA performs ministerial functions and acts only on information provided by the employer? If this is the case, then the TPA has no liability. However, in the future, the TPA want want to change their practices to request actual copies of W-2 forms or payroll reports directly from the [outside] payroll company and not accept reports run internally from the employer for annual wage and deferral reporting. A W-2 is a quick way to tell if the deductions were made pre-tax, etc.

I suggest that what is stated in the service agreement between this firm and the TPA is critical. Hopefully this is not a situation where a service agreement isn't even used. (That thought makes me cringe.) In our agreement we say exactly what we do and what it costs. We also stated that prior errors, issues not specifically related to our service, and/or issues arising from acting in a manner that ignored or was contrary to written advisement we provided, is not our liability. Given the big fat target placed upon the back of the TPA, I just think that as much as possible the terms of service must be clearly defined. Then, the claim that the TPA is somehow responsible for the payroll processing, when that is clearly an issue not under the TPA's purview, is totally baseless. So check out the agreement in effect, and modify future agreements as needed given this new experience. My 2 cents.

Concern over whether the HOA lien is subordinate to a lender sounds irrelevant. Not all such units have a mortgage.

I think so. If the notice says something like "if you don't pay we could do X, Y, Z, and Foreclosure", it is still preventing foreclosure. I see @Belgarath point, but I think it is enough. It is not enough to have a past due notice, but if they list the things they could do to collect, I think payment of the past due amount is the same as preventing them from doing any of the things they could do, including foreclosure.

Most states allow HOAs to foreclose to recover unpaid fees even though they are not the lender. The laws vary and I'm not sure how often it's used but its definately an option HOAs so I would assume the Condo Association could as well.

Shrug. We like to think that we've seen nearly everything and take nearly every precaution to make sure that people don't screw up despite their best efforts, but sh*t still happens. I have indeed prevented some clients from doing stupid stuff like this through hyper-vigilance and experience (sixth sense), but at the same time still have people messing up. It's not your fault.

1.401-1(b)(ii) To be a profit-sharing plan, there must be recurring and substantial contributions out of profits for the employees. In the event a plan is abandoned, the employer should promptly notify the district director, stating the circumstances which led to the discontinuance of the plan. This is a very old reg but is still on the books.

Um, who is "we"?

Most people don't understand 412i/412 e3 plans. They are DB Plans that are exempt from an actuarial val and a 5500 while they are a e3 plan, if they are set up properly to begin with. Assuming yours was set up properly in 2014 (maybe?), then it stopped being a e3 Plan the day that the premium payment is missed. So right then, you needed a val. If the val said you missed your minimum funding for the Plan Year, then you pay the excise tax and put the deficiency on the Schedule SB that you will submit for a regular old DB plan, which it has now become. So you didn't freeze your regular old DB Plan until 2018. You should be looking at preparing all those past 5500s and 5330s and get a fidelity bond. If you bring this case to EPCRS, you can propose ways to fund the NHCEs so you can terminate the Plan. You might want to consider asking for disqualification instead, it may be cheaper given the fees and the back contributions. Please have a good actuary take a look and give you a recommendation.