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The program you describe is legal and unusual. One question -- are the profit sharing contributions made in each payroll, or is there a one time contribution after the year ends?

As far as I can tell the repayment is treated as a rollover - more precisely, a trustee-to-trustee transfer - and therefore is not a "contribution."

I'm a little confused, why the check would include Jane Doe's IRA? If the trust is the beneficiary of the IRA it should be payable to the Trust. Obviously if there are other factors than I can see the payment going to the spouse's IRA. Is the Trust a Qualifying Trust and is it a see-through trust?

Why risk it?Adoptt ew.

without looking at anything, i'm pretty sure that's not kosher. But they could still adopt a PS plan for 2020 and merge it into the 401(k) plan in 2021.

If this isn't a SH Nonelective plan, the poorly performing people do not need to get anything at all. As long as you are passing coverage and nondiscriminaiton testing.

As soon as you can reasonably segregate the deferrals from employer assets. Its going to depend on what the actual process for is, but for something on an ongoing basis, their excuse is not going to cut it. Reasonable is as soon as it should be possible given the facts and circumstances. For example, Owner is traveling and Assistant gets quarantined with Covid and cannot go into the office to mail a check to the plan. The delay is reasonable. Owner is traveling and only deposits once a month because he cannot be bothered to figure out a better solution (like travel with physical checks if they need his signature). Not reasonable. My rule of thumb, absent an unforeseeable intervening event, more than 3-5 days is not reasonable. If that happens every payroll, you should have figured out a way to improve your procedures.

Somehow he ran payroll on time. Should be able to do the same for 401k, traveling or not.

No. No. You report the amount of repayments on Form 8915-E, from $0 to $6k. If you repay less than 1/3 of the CRD, the remainder of the 1/3 must be included in income. Its up to you.

Is the TPA offering a comprehensive 3(16) service as part of this? Outside of this I don't think it's common at all. Within 3(16), probably typical. Speaking as a veteran of the TPA business, it does sort of sound like something a TPA would do - take on more work, responsibility and risk for lower fees! Our industry is sort of addicted to abuse. 😖

Why have they not terminated the plan? If the sole proprietor died, who is the plan sponsor? Either way, assuming she is now in control of the sponsor, she can amend the plan to allow the distribution. There may be some fact and circumstances that need to be resolved depending on how it could impact other participants, but best alternative would be to just terminate the plan and allow retirees to take a lump sum. This would apply to any other retirees as well. Keep in mind RMDs cannot be rolled over and 415 limits still apply to her lump sum.

There is no way to answer that here. He has to work thru the SBA worksheets with his other eligible payroll (and other) expenditures during the applicable period to figure out how much is eligible for forgiveness. Pension contributions paid during the applicable period are includible as payroll costs eligible for forgiveness, subject to the overall compensation limits applicable to owners.

The second attorney is correct.