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Sorry about from the hip answer---Depending on plan document, we had several bogus SSNs for a south Texas employer and I believe that forfeitures to the other employees or reducing that year's contribution was the way we went. If not desired, they could also pay plan expenses if the forfeitures allow it (or with a plan amendment to allow).

Insist on him getting a TIN now that it is known the SSN is invalid. Period. For some reason IRS comes down like a ton of bricks on 1099-R payors reporting distributions with invalid SSNs, this after years of accepting payroll returns, tax withholding and W-2 filings using those same SSNs. IRS first assesses fines on the payors, and it takes a couple of years to get them waived, so they payors routinely have at least two or three pending assessments open with IRS. Basis for penalty abatement is the payors have no way knowing the SSNs were invalid, but that's not the case here.

Makes sense for this particular business actually, but question has more to do with how a prior TPA completed the 5500, reporting the lower amount of $500,000 rather than actual bond amount.

I think it's meant by the poster to say something like "See, I did my research and couldn't quite find the answer."

Wow, talk about thread necromancy. I was a senior in high school when this thread was posted. This thread is almost as old as some of the people working at my company. I agree with Bill, you can never add deferrals retroactively. They could add deferrals for 2021. As long as the deferral feature is effective no later than 10/1/2021, they can also be safe harbor for 2021. If you want to talk about testing options, I would recommend making a new post with more details in either the DB forum or the testing forum.

Even if the pre-approved document has no checkbox or fill-in line for this, a Revenue Procedure mentions “the resignation or replacement of fiduciaries” as an example of an administrative provision an adopting employer may add without losing reliance on the IRS’s opinion letter.

I enjoyed talking with Professor Jon Forman between our presentations to the ERISA Scholars Employee Benefits/Social Insurance Conference. A gentleman, from whom we learned ways much more important than how to make and use law.

Be careful about recent forfeitures. If the people whose account is being forfeited terminated employment within 5 years of the termination date, the IRS can take the position that they should be vested. Certainly if they terminated within 12 months of the termination, there is a vesting issue. If they haven't missed a forfeiture use date, so that the forfeitures are recent, then it makes me think that there's a problem here ...

Dave, you only have 176 posts to go to be a Senior Contributor!