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Any time you amend out a SH Match you need to give 30 days advance notice. I'm not aware of any exception that says, unless it crossed a plan year end.

As David says you will receive the 3% contribution if they are a nonelective safe harbor plan for 2020, your termination in 2020 does not change that as safe harbor contribuitions can not have a last day of the year employment restriction. Whether you can take a distribution now or will have to wait until the contribution is deposited will depend on the terms of the Plan document and the Employer's administrative procedures. It's possible that you can take your funds now and then a second withdrawal after the funds are deposited but you might be charged 2 withdrawal processing fees depending of the how the plan handles that kind of thing. If you don't have an immediate need for the funds or intend to roll them to an IRA, you might consider waiting until the 2020 safe harbor contribution is deposited to your account for simplicity.

I don't recall any guidance on this. The employees never got paid the money, and they are cash basis taxpayers, so it's not obvious to me why they would be taxable in 2019. The custodian is probably correct that since there is no guidance, the IRS could view the 2019 contributions contributed now as having to be counted against 2020 limits, which is why they won't do it. The alternative would be to view the employer as the custodian's agent, and they would not want to go there for a variety of reasons. Presumably the 2019 5498-SA's did not show the contributions. I think if the contributions had been made by the employee's tax return filing deadline for 2019, the custodian would have accepted them. Anyway, my guess is the backed up amounts are includible on W-2 when paid, but will be interested if anyone else has different thought.

In 1985 and 1986, I worked in lobbying on what became the 1986 Act. After enactment, even skimming the enrolled bill to find the retirement plans’ provisions I’d explain in my book, I glanced over many provisions that stated narrow conditions to avoid using a name. Some were mentioned in 1987’s Showdown at Gucci Gulch. https://www.penguinrandomhouse.com/books/118994/showdown-at-gucci-gulch-by-jeffrey-birnbaum/ And a 1988 article about the practice won a Pulitzer Prize. Donald L. Bartlett & James B. Steele, How the Influential Win Billions in Special Tax Breaks, Philadelphia Inquirer, Apr. 10, 1988. That article counted “at least 650 exemptions—preferences, really, for the rich and powerful—through the legislation, most written in cryptic legal and tax jargon that conceals the identity of the beneficiaries.”

But, it is clear that the substance of the tax-gross up payments are compensatory. That is, if this person were not an employee, the company would not be making the gross up payment. The gross up payments are taxable for Federal income taxes and would likely be covered as "compensation" under the plan, but I would check the definition anyway to be sure. This is not clear. Are you saying the employer does not want the employee to defer into the 401(k) from the gross up? If so, why? To reduce a match? Do you mean to say that the payments were eligible compensation for deferral under 401(k) plan?

Let me answer your question this way. An attorney doing the VCP filing who knows that the past-employees should be addressed in the VCP, but purposefully omits them anyway, is committing fraud in front of the IRS. That, and the possibility of severe sanctions from the applicable state bar. If a client asked me to file a VCP to exclude the past employees after I had explained to them why they should be included in the application, I would simply resign.

Yesterday evening, Roll Call reports this is about the St. Louis Carpenters’ Pension Plan. https://www.rollcall.com/2020/12/21/midwestern-carpenters-would-get-relief-in-year-end-tax-package/

Common sense; I did not base anything on a specific statute, agency rule, or other agency interpretation. My explanation about an investment adjustment is grounded on treatises describing courts’ decisions applying the common law of equity or chancery relief. If one needs citations, a lawyer might look to the American Law Institute’s Restatements. Also, the U.S. Labor department has described, but not in an agency rule, a similar framework for the equity concept of restoration to correct a prohibited transaction. You’re right to tell the employer to lawyer-up.

If the employer restores to each Health Savings Account the money not paid over to the HSA custodian (with an investment adjustment), might a 2019 W-2 become correct? Each investment adjustment should be the greater of (i) the investment returns the HSA would have obtained by promptly investing the missing amounts and (ii) the investment return the employer obtained using the money the employer wrongfully had or the interest value of that money, whichever is greater.

That's a fun question! I always wonder when these strangely specific requirements end up in the law, who they were intended to benefit. I downloaded the 2019 5500 data set from the DOL's website and filtered it down to plan type=multiemployer, plan effective date<1970, and business code starts with 232, 236, or 238. There are 537 candidates. Edit: Silly me, I forgot that welfare plans file a 5500 too. Filtered to only include plans that attached a schedule R, it is down to 255 candidates. Edit 2: Since 401(a)(36) only applies to pension plans, filtered out any plans where the characteristic codes did not include a 1, 2B, or 2C. Down to 248 candidates.

The plan should tell you whether "post year end compensation" is included.

If it's a QDRO, you have to do whatever the QDRO says, so that might limit the choices. If you are the alternate payee, many times you can just take a complete distribution and set up your own payment schedule. But if the QDRO awarded you installment payments, that's what you'll likely have to do. Too many variables for advice here, I think.

Open an account at a US Bank. Have the direct deposit go there. Then arrange a wire transfer between your banks. This is not an ERISA or retirement plan issue.

I agree with previous comments. I'd add that most, just about all, people in this situation would roll the money to an IRA and then take distributions from the IRA; generally much easier. As noted, the 401(k) might have restrictions on payouts and also might charge a fee each time. Honestly, it's a very complicated discussion without simple answers; well beyond the scope of this forum. Investment options and fees, direct and indirect, are all critical (within the plan vs. within the IRA and to get into the IRA).

Also, the plan may have a formula for providing installments and might not allow whatever schedule you would devise.

To add to the above (and state the obvious), make sure that your 401(k) plan allows for installment payments that you describe and that you are eligible to begin receiving distributions from the plan.

It's impossible to know, because it will depend heavily on the interest rate. If your account is gaining 5% a year it would be very different than if it were gaining 2% a year. One thing you could do, if you know you want to take a withdrawal every month for exactly 25 years, that means you will have 12 x 25 = 300 total withdrawals. In the first month, take 1/300th of the account, in the second month, take 1/299th of the remaining account, and so on. The amount of the withdrawal will fluctuate with the gains or losses in the account each month but it will be approximately level. Another option is to look into using your account balance to purchase an annuity.