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Thank you all. The plan is subject to ERISA. The plan sponsor (501c entity) made matching contributions contributions since inception. The plan was never formally adopted and no ACP testing was done. We are basically handling all the compliance issues since inception - VCP for plan doc & other issues and DFVC for late Form 5500s.

Hmmm. Well, not there yet, but it's only a number of months away... 😞 Just hoping I'm still needed and fed!

And here's hoping that all you not yet 64 (myself included) survive the craziness and make it there - and well beyond!

I think the TPA doesn't have enough to do. The plan may be terminated but it still exists and can be amended. I'd even say it could be amended after assets are paid out if something needed to be tidied up.

I'm an ERISA attorney, among other things... and ESOP Guy is dead spot on. In essence, one mantra is that you cannot ever delegate completely and a fiduciary always has a duty to oversee. As Harry Truman said, "The buck stops here." An important part of the DOL recent line of ESOP cases is that fiduciaries thought they were delegating but did a fairly obviously inadequate job of overseeing the experts they hired.

I agree with CuseFan and I'll add that your plan probably has a section describing what happens when an employee transfers from an ineligible classification to an eligible one. That section is more than likely going to say that they become a participant on the date that they transfer to an eligible classification, provided they have satisfied the age and service requirements with the employer as of that date.

If the mistaken deposit wasn't really deferrals, then forfeiting it out from the wrong account shouldn't suddenly make it deferral money you couldn't later use, just because it had a bad label on it.

As far as I know your expectation is wrong. it has always been my understanding that a fiduciary can't ever fully delegate their duties. They always have to monitor and review what the experts do to make sure they do their job right. I don't think they can just assume a TPA has sent notices for example. They need to know they were sent in some way. If it is an internal trustee that is a participant did they get a copy of the notice for example? That is a big part of the Greatbanc settlement. It sets out guidelines, and I have always understood them as a guidelines not a safe harbor, to help trustee's understand if they have discharged their duty in regards to the stock appraisal. When you say are there guidelines that say you have discharged their duty and can't be assessed a penalty it sounds like you are looking for some kind of safe harbor rules regarding fiduciary duties. I think the reason you aren't finding anything is because they don't exist. I am happy to have an ERISA attorney, which I am not one, and tell me I am wrong. Every attorney I know on this topic says the way to defend yourself in this area is document your procedures and how you followed them. As long as the procedure was reasonable and they were followed you tend to have a strong defense in this area. As far as I know you can't just claim you hired professionals. They have to follow up to make sure the professional did their job.

DOL Non-ERISA.docx Thought this might help... DOL Advisory Details: Private sector (nongovernmental) 403(b) plans established by 501(c)(3) tax-exempt organizations that meet certain requirements may be exempt from ERISA. It is important to note that these plans are NOT automatically non-ERISA plans. Based on the Department of Labor (DOL) Safe Harbor, a private sector 403(b) plan will not be subject to Title I of ERISA if, among other requirements: 1. employees participate in the 403(b) on a voluntary basis; 2. all rights under the annuity contract or custodial account are enforceable solely by the employee or beneficiary; 3. there are no company contributions and the employer maintains very limited involvement with the 403(b) plan; 4. and the employer receives no compensation, other than a reasonable amount to cover expenses related to the employer’s duties under the contracts. This limited involvement encompasses activities such as depositing contributions, allowing vendors to explain their products, and providing investment choices. Plan sponsors who wish to maintain non-ERISA plans may not make decisions concerning the processing of distributions, approve hardship distributions or loan requests, review qualified domestic relations order (QDRO) requests received by the plan, authorize plan-to-plan transfers or otherwise make any discretionary determinations regarding plan administration. The DOL has determined that handling these functions internally will make the plan subject to ERISA. Field Assistance Bulletin 2010-01 explains that while an annuity provider or other responsible third party selected by a person other than the employer can make these types of administrative decisions, if a Third Party Administrator (TPA) is retained by the employer to provide these services to the plan, the plan will no longer be a non-ERISA plan. 11/12/2020

Agree with Ellie (of course!) and JOH. No mention of ERISA or Non-ERISA status.

I agree with JOH - many 403(b) plans are exempt from ERISA. Be sure to check that!