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no, the IRS will have a record of filed extension.

That is the key difference - in these instances you have unrelated employers, so each is viewed separately. With a CG, it's deemed a single employer.

New name is Inspira Financial. Website as of now is still at mtrustcompany.com

Millennium Trust will set up the IRAs. Millennium Trust has or is changing their name but you should still be able to Google them. They have a pretty simple process which is one of the reasons they have become so popular to send lost participant money to them. PBI is a good search firm but I don't know if the full search service can be done by year end. Their process includes sending confirmation letters to the person. https://www.pbinfo.com/

There is no grace period. There are a few thoughts: Try to work with Empower to preserve the next day timing. We have been successful doing this if the conversion manager is knowledgeable and cooperative. It works particularly well if the payroll file is transmitted the day before the payroll date so Empower can run their edits and validations overnight and you can fund the next day. If the conversion manager does not know how to make this happen, complain to the Empower sales executive that made all of those wonderful promises about reaching Nirvana. The auditor does not have the authority to say when a deposit is or is not late. The authority belongs to the IRS/DOL. The auditor can disagree, but the Plan Administrator is signing the Form 5500 and answering the compliance question about late deposits. The client should be able to show they are funding as quickly as they can within the constraints imposed on them by the recordkeeper. If there is a change in recordkeepers and as a result there is a change in the timing of deposits from next day to 2-3 days due to the new recordkeeper's procedures, there likely will be no push-back from the IRS/DOL. If there is, appeal it to the agents manager with a full explanation of the circumstances. If the manager in intransigent, you could even take it to Tim Hauser, the Deputy Assistant Secretary for Program Operations of the Employee Benefits Security Administration (EBSA). He says he wants to hear when the DOL is being unreasonable and his contact information is publicly available. If there is a late deferral as part of the transition process, the world will not end and any financial impact will be minimal. Good luck!

If you have SSNs for the missing participants, there are low-cost search services that have a very high success rate in locating the them (~99%), and you will get a response in 2-3 days. The fee is reasonable and you can charge the participant's account for the cost of the search. (BL Message me if you want the name of the company we use.) If the participants who will not return the paperwork are still employed, then the company should be able to convince them to turn in the paperwork. If suggesting cooperation to a participant doesn't get a response, then a harder line is the company tells the participant that failing to turn in the paperwork is going cost everyone including the company and them money, and jeopardize the timely closing of the plan which will be significantly frowned upon. If any active or terminated participant still will not return the paperwork, then you can tell them if you don't get the paperwork within xx number of days, you are going to turn over their account to the government (PBGC) and they can deal with the government when then finally want to get paid. And by the way, the government will not invest the money. If that doesn't scare them enough, imagine their surprise when you do in fact use the PBGC program and tell them where they can find their account. None of this is complicated, costly, or overly time-consuming.

I understand it is not the actual distribution. What I was illuding to (since it did not happen on 06/30) make an assumption that the LS will be paid on 7/1/2023. It is your assumption , not theirs. I should have phrased it better first time.

There are quite a few institutions that will establish cashout IRAs for missing/non responsive participants and will allow you to exceed the normal $5,000 limit if the Plan is terminating. Assuming you've done the DOL due diligence search per DOL regs. Alternatively you can use the PBGC program for terminating DC plans that was setup a few years ago. The PBGC program though is all or none. That is you need to turn over all missing/non-responsive participants or you can't use their program. There are specific requirements for using the program that are similar to the DOL rules. Most recently I've used Pencheck for a terminating 401(k) Plan that had a few missing/non-responsive. I think Millienium Trust is another who will do it. But those are by no means the only two.

BOY or EOY valuation? That should give you the answer.

Truphao's comments about timing are the potential issue. I think you clearly have a problem if the service credit or compensation used extends back to any point where he still had employees as that seems to be covered in the examples. I think it's more gray if you draft the Plan such that there is no overlap between the Plan's existence and period where he still had employees. I mean at some point he has to be eligible to establish a plan right? But is it 1 day after he has no employees? the next fiscal year? 12 months after? 5 years? I'm not sure it's fully address, just falls under the catch all "facts and circumstance" For further you can start at... § 1.401(a)(4)-5 Plan amendments and plan terminations. (a) Introduction — (1) Overview. This paragraph (a) provides rules for determining whether the timing of a plan amendment or series of amendments has the effect of discriminating significantly in favor of HCEs or former HCEs. For purposes of this section, a plan amendment includes, for example, the establishment or termination of the plan, and any change in the benefits, rights, or features, benefit formulas, or allocation formulas under the plan. Paragraph (b) of this section sets forth additional requirements that must be satisfied in the case of a plan termination.

This bothers me as well. Basically, the Owner waits until he "fires" all his employees and only then starts a new plan for himself. Timing of plan amendment/adoption issue? If the sale took place in 2022 that would be different. Just thinking out loud.

Related employers are treated as a single employer and you must aggregate compensation from all when applying the limit. You don't calculate a 415 limit separately under each employer or a separate ADP for the employee under each employer, or apply hours of service separately, so same with applying the comp limit.

Through the discontinuance, the SH match must be 100% vested and cannot be cut back under 411 even if the Sponsor had to test the matching contributions in the ACP test because of the mid-year stop. Any match made after the safe harbor halt would be subject to the Plan terms so RTD.

When the match was made/allocated in part of 2020 it was a safe harbor match and required to be fully vested at that time. Subsequent events may have taken the plan out of safe harbor status but I don't think they change the nature/vesting of the contributions previously accrued. Regarding 2022 treatment, I would see what the VCP filing and amendment says. For example, say a 3% SHNE plan is amended effective 7/1 to suspend the SH contribution. The plan is no longer SH and must do ADP testing, but that doesn't magically shift the fully vested 1/1-6/30 3% SHNE to profit sharing subject to vesting.