Hypothetical situation:
Cash Balance Plan terminated and paid out 2 years ago, final 5500 was filed. Plan was never filed with the PBGC due to qualifying exemption as a professional service firm. You are requisitioned to assist with facilitating report and documentation exchange to a potential buyer in an acquisition of the (former) Plan Sponsor as your former colleague who handled this plan is no longer employed. You notice that the plan exceeded 25 active participants and probably should have been covered for the last 3 years. In their very thorough due-diligence, appears the potential buyer has also noticed.
What is the potential exposure here? How would one go about even starting a corrective action. At minimum, I'm thinking comprehensive premium filings and payments for the years coverage is obligatory. I also see ERISA 4071 states the max per-day penalty, which looks very significant, but also that they would not likely charge that in a case like this. Would one go so far as to say this is a qualification failure with a need to seek IRS remediation? Any other considerations?
