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An absurd situation with apparently no one paying any attention to the little details that we all spend our life worrying about! I would think the assets could not have been moved from A's plan to any other place without A authorizing it (which he probably did). But in military parlance, this is a FUBAR! (You can google that if you don't know the term.) It will likely take a seasoned ERISA specialist (possibly an attorney, but not always) to figure it out, get to the bottom of what happened, and figure out all the things that need to be done to fix it. And of course, it's unlikely the client wants to pay for it because if he had been paying for competent assistance all along, this would have been identified when it happened and fixed at that point! I'd get paid in advance if I was hired to help this guy.

One approach taken on behalf of creditors is to challenge the qualified status of a 401(k) plan. ROBS plans are vulnerable to such a challenge. I suspect the reason that there are "many" ROBS plans is that the IRS does not have the resources to challenge them, so it may appear that they stand.

Was the pre-existing money in Sponsor A's plan also sent to PEO plan? Or were only new contributions sent to the PEO plan, leaving the old money untouched? Has the Sponsor A plan been filing 5500s? Did they treat their plan terminated as of the payroll service change date? Forgive my skepticism I find it hard to believe there was no paperwork. Not even a blackout notice? I'm guessing there is some sort of paperwork (albeit probably incorrect or incomplete) somewhere. Either way both plans would have failures. Both the PEO plan fiduciaries and Sponsor A Plan fiduciaries should be aware they likely have fiduciary breaches. Especially if they accepted money that didn't belong to the PEO plan, or sent money from the sponsor A plan that shouldn't have been sent. The PEO Plan would need to disgorge the money and earnings tied to Sponsor A. Sponsor A's Plan needs to try to recover the erroneous contributions. Regardless of where the money was held (erroneously in the PEO plan) the money would be assets of Sponsor A's plan, and should probably be reported as such on the annual accounting, Form 5500s, etc. And to answer your question - Yes something like this would be a significant plan error and should go through VCP. I would not self correct this. No - the money shouldn't go to IRAs. I'm sure others can chime in with things I've missed and further suggestions.

We've done it (extended but not filed) and I don't recall any follow up. I would not - NOT - do anything proactively. Poke yourself in the eye if you want for similar results.

Refinancing involves replacing the original loan with a new loan - usually to get a new interest rate or add additional funds. Re-amortizing an existing loan without adding additional funds and at the loan's original interest rate in order to keep it in compliance does not, in my opinion, constitute refinancing.