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The only exception to the exclusive plan rule for a SIMPLE is a safe harbor 401(k) plan. The rule required the SIMPLE to end and the safe harbor 401(k) deferrals to begin the next day and the deferral limits are then pro-rated for the year. I agree that the safe harbor 401(k) plan must have at least 3 months of deferrals in the year to allow the plan to be safe harbor, so you may likely be out of time for 2025.

Before doing any 5500 filings, follow @RatherBeGolfing's suggestion to involve an ERISA attorney. Given the long period of time the plan was operating out of compliance, the attorney and TPA together can work with the client to determine if all of the information is available to complete the forms accurately, and is available to apply remedial actions to bring plan into compliance. If the information is incomplete, then the path forward likely will ultimately involve negotiating a resolution with the IRS and DOL. Sometimes in situations where plans have been out of compliance for many years, the cost and effort try to to reconstruct exactly what should have happened versus what did happen, and then trying to apply the prescribed remedies can be economically fatal to the company. A knowledgeable ERISA attorney may be able to propose another strategy that could be painful but not fatal. Having a strategy for remediation can help determine when the 5500 filings should be submitted.

EZ late filer penalty cap is 3x$500

If you are just asking which form to file, you file an EZ for the years it was a one participant plan, and an SF or (5500 with Sch I) for the years when it was not a one participant plan. I would take it to an ERISA attorney ASAP. Can he even afford to "save" the plan considering all the issues?

A word of caution, only because I have seen this misunderstanding before (more than once) - just because a person takes a hardship that does not mean they stop making loan payments.

I’ve worked on reconstructing (at once) more than 20 years’ plan reports and financial statements. If one decides to use the delinquent-filer program, assemble completely all years’ Form 5500 reports before submitting anything. Test them for EBSA’s edit checks. Test each report for internal logical consistency. Test all the reports for year-to-year and other logical consistency. Consider also that the business organization and its owner (and we guess those are the plan’s administrator and trustee) might want the evidence-law privilege for confidential lawyer-client communications. For work not done by the lawyer or her assistants, consider having the lawyer engage the third-party administrator under a Kovel arrangement to preserve that confidential-communications privilege. This is not advice to anyone.

Indeed it is, thanks Bill.

A SIMPLE IRA has to be the only plan sponsored by the employer. https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-simple-ira-plans

Ok. Well, the 5500 is the easy part. EZ for years when no employees were covered, otherwise SF. The user fee is capped at two years, so the penalty for late 5500s shouldn't exceed $2,500 assuming at least two EZs and two SFs (2x$500 +2x$750).

While this is off-topic for austin3515’s query, a quick observation: EBSA’s approach to abandoned-plan situations is to suggest almost anything that persuades someone to cause payments to participants and beneficiaries. In my experience, that includes ignoring plan or trust provisions that might slow down a path to that desired end. And in a way your and my experiences might suggest something about how austin3515’s client evaluates its choices. If there is a course of action that flunks a tax-qualification condition but is unlikely to be examined by the Internal Revenue Service, a decision-maker might find it’s worth taking a risk that the plan later is found to have been tax-disqualified if doing so speeds the plan’s termination and final distribution. While it’s fact-sensitive, there might be circumstances in which an imperfect allocation from forfeitures could be a reasoned choice. This is not advice to anyone.

assuming this is via ach, sounds like its late then. hindsight is 20/20 the employer should have at least revised and submitted the people they could. and then only a portion would be late and in future years, they should get people added to the recordkeeper sooner, even if the deposit is going to occur at the 11th hour. no reason to wait to input employee data until the 11th hour.

Statutorily, yes, but make sure the plan's provisions allow.

Even if the suggested interpretation of ERISA’s title I and the Internal Revenue Code might be reasonable (and I don't suggest that it is), what does the plan’s governing document provide?