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If the TPA is enrolled in some manner covered by Circular 230 he/she/they cannot prepare the form with knowingly false information without risking enrollment and other sanctions as outlined, you can read it for yourself. Even if not formally covered by 230, it's a good guideline for standards of practice. If the TPA has already been paid to prepare the 5500, they should do so with correct information as they understand it and send it to the client, client can choose to file it or not. Alternatively resign and possibly refund any pre-paid fee. If the TPA hasn't been paid and the client doesn't have money to pay the TPA, best just to resign. There is just not enough profit in any one administration engagement to justify a TPA knowingly preparing an incorrect return. If/when the SHTF the client will come back and blame the TPA for doing so.

I would say no. It is not a plan expense. Plus, the expense is beyond the plan administrator's control, and therefore the PA cannot determine if the fee is reasonable. And the PA cannot control where that advice comes from. Could I ask my broker for advice? My brother's wife who works in finance at her company? My buddy, who's broker is EF Hutton, and EF Hutton says... (Only those of a certain age will get that last reference)

I have both seen and done that. I doubt it is right. What I have found is the few times a plan didn't have a fidelity bond and a DOL or IRS auditor comes around they just make the plan get one. I have never seen them get in actual trouble. Having said that not following the rules and hoping for no problems is not a good plan obviously.

But are counted as included but not benefitting for the three coverage tests.

Also, the tax cost basis must be pro-rata under IRC 72(m)(10) and if there is a brokeragelink (brokerage window) then those funds would need to be converted back to standard investment options as they will not pay the alternate payee anything from a brokeragelink sub-account.