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Our firm does not administer these, so I may not be much help. However, one of our concerns is obtaining a legitimate valuation of the stock. The last plan with a ROBS transaction we looked at, the stock valuation provided to us was literally just a value written on a piece of paper determined by the owner. I think obtaining a legitimate valuation from a professional is expensive and the cost may deter owners from obtaining a proper valuation. We ran away from this one. We don't see ROBS often, but this is one reason we don't have interest.

Depends on the terms of the plan, particularly the definition of eligible employee, and if X & Y are now one company XY or still separate companies X & Y now within a control group. Plans often exclude employees related to a transaction until the end of the transition period referenced by Bill and often exclude employees of an affiliated employer unless that employer adopts the plan for its employees. Agreed, and it still amazes me how retirement plans continue to be ignored during due diligence and then subject to scrambling damage control thereafter - at least in the smaller company market.

I still think just correct the reporting error and move on. If IRS questions - then the answer is yes, we saw that and corrected to report the proper vested % and $, no harm no foul on the participant.

It depends on the distribution timing policy. If your plan allows for withdrawals of rollover money at any time, then you'd have a benefit offset. If the rollover money isn't distributable until some later time (age/service/etc.) then you have a deemed distribution instead.

If X acquired Y, your best bet is to likely take advantage of the 410b6 transition phase. Leave Y alone and keep the plan in place until the end of the year. Start a new plan for X if you wish. Then merge them and turn the safe harbor off for 2023. That's just one option. The best option would have been to make all the decisions before the purchase.

One more play: Did you read the forms the participant signed (whether in ink, or electronically) when she claimed the hardship distribution? Some recordkeepers design those forms to include the claimant’s assent to her responsibility to resume deferrals.

Does the Plan have default investment language?

Why is it the employee's responsibility to open an account? The plan has to have a trustee. This is the trustee's duty. DOL rules on this are quite clear - it has to be deposited as soon as administratively feasible. There is a 7-business day safe harbor for small plans.

It would have had to be deposited by September 15 in order to be deductible for 2020, assuming that the employer's tax filing deadline including extensions was September 15. However deductibility is not a qualification requirement, so the fact that the employer failed to make the contribution by the deduction deadline is not in and of itself a qualification failure, and therefore not correctable under EPCRS.

I would just fix them and move on - it's only a reporting error. Unless additional amounts were forfeited applying the vested percentage a second time, which does not seem to have happened, nothing has been taken away from the participant.

If the true-up were going to be offset by a payable, then I'd say there would have had to be 1099s for those amounts issued before they were even deposited. update to Nate's emoji: I just meant that if the claim is that they have a contribution receivable but also that amount as a corresponding payable, in an attempt to "deem them no longer a participant as of 12/31", then that payable should have generated a 1099-R for the same year, so that the participant indeed is deemed to have a zero balance from the offsetting receivable/payable.