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I will leave up to the lawyers to fill in the details because there seems to be a lot of wiggle room to extend the time frames. Generally, "29 U.S. Code § 1113 - Limitation of actions No action may be commenced under this subchapter with respect to a fiduciary’s breach of any responsibility, duty, or obligation under this part, or with respect to a violation of this part, after the earlier of— (1) six years after (A) the date of the last action which constituted a part of the breach or violation, or (B) in the case of an omission the latest date on which the fiduciary could have cured the breach or violation, or (2) three years after the earliest date on which the plaintiff had actual knowledge of the breach or violation; except that in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation." (The "actual knowledge" phrase baffles me.) Part of the decision for how much insurance to have and for how long is assessing the risk. Since this is a plan termination, making sure that everyone who has an accrued benefit is paid in full and keeping getting documentation proof that the checks were cashed goes a long way towards having some peace of mind.

I think you are on the right track. If the Plan will fail 410(b) for 2023 because it excludes Company A employees, the Plan should be retroactively amended to 1/1/2023 (not 7/2/2023) to have A adopt the Plan. This is because you are giving the Company A employees a corrective contribution (for a missed deferral opportunity) for the period 1/1/2023 to 7/1/2023. You cannot give a corrective contribution to employees without first making them participants, and they cannot participate unless Company A has adopted the plan. To answer your second question, all Company A employees who would otherwise be eligible to receive a SH NEC under the Plan if Company A had adopted the Plan as of 1/1/2023 should be included in your corrective contribution (missed deferral opportunity). Hope this helps.

I once (MANY years ago, back in the days when I was young, and still sometimes tried to make sense of things, rather than just accepting them) looked into this a little bit - not in-depth, but the original CG rules pre-date even ERISA - it was an income tax thing to prevent manipulation of corporate income taxes. Then ERISA pulled it into coverage/nondiscrimination, and as MOJO says, clever people found other ways to try to manipulate the rules, and we eventually got to where we are today.

To return to Lou S.’s query, the statute, the Internal Revenue Code of 1986, reads: § 401(k)(2)(B)(i)(III) A qualified cash or deferred arrangement must meet a set of conditions, which include: “(B) . . . amounts held by the trust which are attributable to employer contributions made pursuant to the employee’s election— (i) may not be distributable to participants or other beneficiaries earlier than— (III) in the case of a profit-sharing or stock bonus plan, the attainment of age 59½[.]” Accord 26 C.F.R. § 1.401(k)-1(d)(1)(ii)(A) (“[t]he employee’s attainment of age 59½”). § 72(t)(2)(A)(i) “Except as provided in paragraphs (3) and (4), paragraph (1) [the imposition of an extra tax on a too-early distribution] shall not apply to any of the following distributions: Distributions which are—made on or after the date on which the employee attains age 59½[.]”

ERISA § 413, which Paul I points to, governs a fiduciary-breach claim under ERISA’s title I. ERISA does not specify a limitations period for a benefit claim. Federal and States’ courts’ interpretations and applications vary, and sometimes “borrow” a period from a relevant State’s law. Claims under banking, insurance, securities, and other law might involve yet different periods. Instead of assuming the risk of error about which rule or rules might apply and how a court might interpret and apply them, a fiduciary might consider, with its lawyer’s evaluation and other help, negotiating an insurance contract under which one premium covers the tail risks with the insurer underwriting the risk on how long the fiduciary’s exposure continues. Just my musing; not advice to anyone.

the SH is due within 12 months after the plan year ends, regardless of what year's tax return they deduct it on (although, subject to 404 limitations if they tried to deduct it in a short tax year)