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I think David's cryptic message was meant to say "the correct answer is NO it is not terminated." You file it as a final but show the transfer on 8j, 13b and c.

Under ERISA the onus is in the plan to show it made benefit payment and retain such records. As to why they are coming out of the wood work now it's possible they were reported on Form SSA and are just now applying for social security benefit and received a "you may be entitled to benefits form the XYZ Plan.

Mistake was to terminate plan as of 6/30. As others noted, that means he has ZERO compensation for the short plan year. Consider rescinding the termination and re-terminating as of 12/31 if getting a contribution for this year is important enough to the parties.

I think most folks, myself included, would say he has no comp on 6/30 and therefore no contributions of any kind allowed. It's effectively all earned on 12/31.

Would it help to look at lines 8j and 13b and 13c?

Belgarath, 86-142 only addresses brokerage commissions, and says they are intrinsic investment expenses that must be paid by the plan or trust, and if paid by employer or IRA owner are deemed to be contributions. I am not aware (although there may be some) of guidance directly dealing with investment management expenses. Under 1.404(a)(3)(d) and 86-142 we know that the employer or IRA owner can separately pay plan or IRA trustee's fees, actuarial fees, and administrative fees. Opposite for brokerage commissions. Investment management fees would seem to fall more on the trustee/administrative fee side of the ledger, and that conclusion is clearly implied by the wrap fee rulings discussed in the Groom article that you provide the link for. And note that this issue (whether investment management fees can be paid and deducted separate from plan contributions in the first place) is even more basic than David's original question, which assumed that they could if the investments were in a 401(a) plan trust as opposed to being spread across to IRAs ion a SEP arrangement.

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