Wondering if anyone encountered this before or has insight on it. If a 401(k) is adopted by an agent (i.e. business manager) who wasn’t authorized to do so, but employees become enrolled and make deferrals etc. and eventually the employer discovers the issue — what is the status of the plan and what must happen to the “plan assets”? Would any of ERISA’s provisions apply or not? Could the employer delay returning the contributions to let litigation run its course or would this implicate anti-alienation restrictions? Thanks for any thoughts. What if certain participants were not eligible under the terms of the plan…how would that be navigated in light of the fact that the entire plan was improperly adopted?
