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Maybe the recordkeeper has a $25 distribution fee?

I'm not sure that situation is contemplated by the Regs, if it is I have not seen it. I don't know if this is the correct answer but if it came up in one of our Plans, we would issue the requested 402(g) refund but would NOT rerun the ADP test as the excess was due to contributions to an unrelated Plan that the Sponsor had no control over. Unless there is a reg I'm missing that address this situation.

The affidavit could be boot strapped if the employer could say I distributed the SPD along with a beneficiary designation form. I have a stack of completed beneficiary forms.

Oh, they know

For terminating plans, we're doing the C3 and then a plan term CARES/SECURE amendment package provided by our document provider. It's a comfort thing. Especially if the client doesn't want to go in for a letter, which they never do.

Restatement of terminating plan is not required but plan must be up to date for all laws (including SECURES, CARES et al) - so best way to ensure that would be a cycle 3 restatement. Not sure on timing, if you do before you distribute assets I think you're safe. Do not think stock or asset sale matters.

You're good, ignore the software.

At least since 1960, the Treasury department has a rule: “A qualified pension, profit-sharing, or stock bonus plan is a definite written program and arrangement which is communicated to the employees[.]” 26 C.F.R. § 1.401-1(a)(2) (emphasis added) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR6f8c3724b50e44d/section-1.401-1#p-1.401-1(a)(2) The tax-law worry is that a plan isn’t really a plan if employees beyond the owner or top executives don’t know the plan exists. Whatever ostensibly non-discriminatory provisions a plan has aren’t practically real if employees don’t know they have legally enforceable rights. Since the late 1970s, IRS examiners have looked to delivery of a summary plan description as a way (and perhaps a presumed normal way) to “communicate” a plan. Also, an accrued benefit statement might be another way an employee could learn about a plan’s existence and her potential right under the plan. The Internal Revenue Service might consider the quoted rule (and some related tax-law rules) as supporting some information requests that otherwise lack a particular tax-treatment hook. And even for unsupported information requests, your client will want your advice about whether it’s wise or unwise to object. An ERISA rule confirms that “in-hand delivery to an employee at his or her worksite is acceptable.” 29 C.F.R. § 2520.104b-1(b)(1) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-C/part-2520/section-2520.104b-1 If some SPDs, benefit statements, and other communications were hand-delivered, your client might want your help in drafting or editing an affidavit that states what your client did. And an affidavit might describe the employer/administrator’s regular practice for mailing communications not delivered in the worksite.

WCC- you make an interesting point about auto enrollment into pre-tax v. Roth. My thought is once the funds are in a Roth, it's irrevocable, unlike pre-tax where you can do a IRR and make the funds into a roth. I think it's safer to default to the pre-tax since you have that flexibility. But i like the question.

If you actually read section 4.01(c) in the FT William basic though, the fail-safe described there doesn't make a lot of sense with respect to 401(a)(26), especially for the meaningful benefit part of 401(a)(26). Their EGTRRA document allowed you to specify a target benefit accrual (usually 0.5%, as per the Schultz memo), and if 401(a)(26) failed, you would increase benefits starting with the participants whose benefit accrual was the largest but less than the specified target amount. The PPA document says nothing about any target amount and instead says that you start by expanding the group of participants to include employees who would not otherwise be eligible. I am with Dalai Pookah on this, I am curious why the old fail-safe was removed in the PPA document as it provides a more sensible default method for correcting a failure. We asked FT about this back when the PPA document came out, but did not get a satisfying reply - they said, basically, they did not think the IRS would approve their document with that language in it. Like CuseFan, we have moved over to relying on retroactive corrective amendments when needed. However that comes with its own issues, including compliance with 1.401(a)(4)-11(g), 1.401(a)(26)-7(c), 436(c), and 412(d)(2).