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What would you propose as an alternative? The decision to amend the plan to allow for Roth is made above the participant level. If the plan is not amended, then the proposed participant communication seems appropriate. Unless the financial institution has discretion to make plan decisions, including to amend plans to allow Roth contributions(or disallow catch-up), I don't see any alternative. Plans are not required to offer Roth or disallow catch-up. Many the financial institution / recordkeeper do not charge enough or have a set-up that allows a lot of personalized customized plan design and follow-through, depending on the size of the plan. Unless they are on a service level where the financial institution is going to contact each affected plan sponsor personally, and educate them on the pros and cons of amending or not, I don't see it changing. Does the financial institution also maintain the plan's document for these clients? If not, they really aren't in a position to do much else. What is your role? If you are an advisor or TPA, those are the service providers I see doing more education with plan sponsors if a plan does not allow for Roth, but does allow for catch-up. I have had a number follow-up with sponsors throughout the year to educate and see if they would agree to plan amendments.

I have had this done with clients in the past and as long as it was all fixed in the same calendar year and all the reporting is corrected by payroll - it was deemed "corrected" - no harm, no foul. In some cases, payroll had it right, but the deposit to the plan accounts was uploaded incorrectly (an easier situation to correct). We may have documented the correction of the operation error and self-correction via resolution (especially if the plan is subject to audit - this helps). I think the key in administration is to ensure someone(s) is always minding the store and proving that. The split payroll thing between allocating an deferral election between both pre-tax and ROTH (whether deemed or not) will no doubt be an issue next year. I don't see many participants catching it, let alone catching it timely. This needs to be a check/limit at the payroll level.

If the plan was not terminated by corporate action (resolution, amendment, etc.) prior to the sale closing then it came over to the buyer as a result of the transaction and the buyer can maintain for however long it desires and contributions can continue. If the plan was officially terminated pre-sale then the only contributions that should have been withheld and subsequently remitted were those attributable to pre-sale payroll and receivable as of the sale closing date. If the buyer now has the plan, a termination thereof would mean a one year wait to establish another 401(k) if subsequently desired.

I guess in a narrow view, nobody HAD to explain it to the ER. It's up to them to understand the plan document they are signing, and they are the ones (usually) tasked with operating the plan. However, I'm guessing someone approached the ER about setting up the plan and steering them to a SH arrangement. Whoever did that should have at least explained it to the ER the mandatory contribs and the conditions under which they would be made. It's certainly possible that the ER just tuned out and/or only heard the PS part of the funding. Or maybe thought the SH and PS were the same... I guess they can remove the SH for '26 and just do ADP testing. And tehy doen' even have to give refunds! They can do a QNEC. And guess what? Those don't even have to go to those employed on the last day of the year either!