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I don't see the other post, and in general there is no need to post in different forums - everyone, or most everyone, just gets a feed of new activity, I think. Anyway, I see no reason for the plan to do anything. Money was deferred; the fact that some of the bonus was clawed back is not relevant to the plan.

Hi all An update. Finally got the determination from PBGC as NOT covered. Based on all the information they asked for (and they did ask a lot), they determined that this particular financial company is a professional entity due to the owner's credentials as well as other criteria. It took them 5 months to provide the determination. I guess never assume is the morale of this story. Just sharing.

The problem is that there likely is no authority on point - especially at the state level. We take a very practical approach - and would do so even in the case of the trustee issue you reference as being discussed in the other thread. It is a "business" that sponsors the plan. Regardless of the nature of the form of entity that business is conducted under, upon the death of the "owner/operator" the decedent's estate representative (Administrator/Executor) now has control as having indicia of ownership. In a corporate setting, it's easy. The estate rep now controls the shares, can call a special meeting of the shareholder, appoint themselves as director, etc., and then manage the business entity - including with winding up of the plan. In pass through situations, it depends. LLC's are more like traditional corporate structures and it's the same. Sole proprietorships are the personal property of the sole proprietor/decedent, and as such, come under the control of the estate rep, who not only has the power to wind up the affairs of the business side of the decedent's "persona" but also probably has an obligation to do so as well (receivables? Payable? - They are assets and liabilities of the estate). The plan is both an asset and a liability. The asset is the benefit due, the liability is the tax consequences if it isn't done right. The estate rep steps into the shoes of the decedent to handle that as well. In the other thread where the financial institution is being intransigent, I'd haul their a$$ into probate court - not attempt to get a court to appoint a successor trustee. My experience is that probate courts don't mess with a lot of BS. The asset of benefits due needs to be collected, the court can (and I've seen it happen) and will issue an order directing the holder of those assets to turn them over to the estate rep (as successor trustee or whatever) to get it wound up. The financial institution now has a piece of paper to put in the file, and usually will comply.

I think it depends on what sort of relief you want from the VCP application. (Definitely too long ago for SCP.) If you're trying to argue that a group of employees were never intended to be allowed into the plan, and you have some documentation/notes to the effect, you might have an argument to ask them to forgive the missed deferrals. You're telling the IRS where your sponsor messed up and how the sponsor proposes to fix it. It's on the Service to either accept the proposed fix, or make you go back as far as necessary for them to accept your proposal. But if you don't have any evidence as to why they were left out, you might indeed be faced with a mighty amount of makeups.