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Why do I get the feeling this is happening for hundreds and hundreds of plans...

If the plan was not established before December 29, 2022 (or the plan’s elective-deferral arrangement began on or after December 29, 2022), the plan is neither a governmental plan nor a church plan, and neither the new-employer nor the small-employer exception applies: Are you sure there is, for tax-treatment purposes, a plan-document failure? If the plan provides an automatic-contribution arrangement because the employer presumes it will amend, retroactively, the written plan to meet Internal Revenue Code § 414A’s tax-treatment condition, shouldn’t such an amendment be within Congress’s (SECURE 2022) and the IRS’s remedial-amendment period? IRS, Miscellaneous Changes Under the SECURE 2.0 Act of 2022, Notice 2024-2, 2024-2 I.R.B. 316, 332-333 (Jan. 8, 2024), at Q&A-J1., https://www.irs.gov/pub/irs-irbs/irb24-02.pdf.

Internal Revenue Code § 414A(a)(1) provides: “[A]n arrangement shall not be treated as a qualified cash or deferred arrangement described in section 401(k) unless such arrangement meets the automatic enrollment requirements[.]” A plan might be amended to remove automatic-contribution provisions if the plan is amended to omit an elective-deferral arrangement. But how many plan sponsors want a plan only for an employer’s nonelective contributions?

First, I did not think you could tie your ICR to an equity index like the S&P500 but had to tie it to a specific S&P500 index fund. Second, as John stated, it is cumulative. The account balance goes up or down annually per the ICR and can and will be negative until such time as it gets paid out. Assuming future pay credits of $10,000, a 12/31/2024 first year balance of $10,000 has negative interest of $2,000 after the 20% loss and gets $10,000 pay credit at 12/31/2025 for balance of $18,000. 10% gain in 2026 yields interest credit of $1,800 and $10,000 pay credit makes balance $29,800 at 12/31/2026, and so on. However, if this person left and was getting paid out, they would get $30,000 ($10,000 x 3 years) - unless the plan has defined ICR floor as may be permitted by the regulations, as John noted.

My understanding is that it is cumulative, that the preservation of capital requirement applies upon distribution unless the terms of the plan dictate otherwise, such as a zero percent annual floor. Using actual ROR can cause high 401(a)(26) minimums when there are low or negative investment returns and can cause low 415 lump sum payout limits when there are high investment returns, so be careful out there!

Good advice above. My suggestion is to carefully inspect all the relevant filings and dates. For example, your checklist should include: making sure there is no typo (especially the EIN) on the 5500 and/or PBGC filing(s). verifying (don't assume) the exact date each payment was made. For example, if the 09/15 payment was made on 09/16, that is late.

Just observing that you edited your OP, but the thread doesn't say "edited", which I find odd? The way you have it worded now, does not look as much like a scam as it did previously. Hmm, I edited my first post to remove the name as you did, but it doesn't say "edited" either. I guess they changed that functionality. Anyway, I think not filing a 5500 could cause the PBGC to assume they missed an MRC. Also, if their funded ratio was low, the PBGC considers quarterly contributions to be "required minimums". Years ago they put a lien on one of my clients for missing quarterlies.