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I would step away from the table and let ERISA counsel step in.

"This could have been avoided had they involved me at the time of the acquisition but they chose not to." So aggravating when plan sponsors don't communicate on M&A's until it's too late. I feel your pain!

Without commenting on which, or whether any, description of the law is right or wrong: Consider that each of ADP or Ascensus routinely asserts it does not provide tax or legal advice. Recordkeepers and other service providers use plenty of smart people, who often know as much or more law than lawyers in law firms. But evaluate whether it’s prudent to follow legal advice from a person that denies that it provides legal advice.

My wider point is that an adviser—no matter how great her knowledge, methods, and skills—cannot render good advice until she knows the identity of the advisee and learns the advisee’s goals and interests. In the situation described, the seller and the buyer might have diverging interests—at the least, one ought to recognize that possibility. A search for “the correct solution” is not in the abstract. Which solution is fitting depends on what one’s advisee hopes to accomplish.

From a tax code stand point I agree with you. From a Plan Document and Custodial Account agreement and what each provider allows - read the document(s).

Current law provides that plan amendments must generally be adopted by the last day of the plan year in which the amendment is effective. This precludes an employer from adding plan provisions after the end of the plan year, even though the provisions may be beneficial to participants. Section 316 of SECURE Act 2.0 allows discretionary amendments that increase participants’ benefits to be adopted by the due date of the employer’s tax return. But that section is not effective until plan years beginning after December 31, 2023.

Retirement is one of the few areas where there is some bipartisan agreement. Also, who wants to be the one to tell their higher income voters that they cant make catch-up contributions? The rank and file voters won't care since very few earn enough to worry about catch-ups anyway. I think that a technical correction here is about as much of a given as it can be in DC.

Exactly, any limitations are service provider imposed, not regulatory.

Yeah that is probably what will happen. However I think it might be important to note that it is the prior congress that passed the law and the current congress that will be responsible for approving the technical corrections and the nominal guy in charge of the current House was pretty outspoken against passing the law in the first place. Again I think it will get worked out like it usually does but given the acrimony and dysfunction in today's Washington I'm not sure it's a given.

Yes - that's the form. ( I was looking, too for it but C.B. beat me to it!) When my husband was first disabled a few years back we received a 1099-R from an IRA withdrawal that was coded with "1" because he was only 57. I prepared and sent the 5329 form with our return to show that the 10% did not apply.

I believe the person would need to attach Form 5329 to their tax return.

Why was an owner only plan doing FASB accounting? Just seems really odd. Typically you only do FASB for companies that do GAP accounting. The FASB accounting entries generally impact the value of the company. FASB expense is only an accounting expense and not real cash. The tax impact is generally based on cash contributions which are determined independently from the FASB expenses.