401k Conundrums

Thank you all, for your comments and suggestions. I've completed solo-k cleanups in the past but none that crossed over to Title I plan status. I do wish marketing teams who are out there selling these would be more transparent and inform business owners about the potential pitfalls and the benefits of involving a TPA.

There are significant assets in the plan, doesn't want a plan disqualification if at all possible. We are discussing with an ERISA attorney...but they too have not ran into this exact issue so just reaching out to see if anyone else may have been in this predicament and how they handled the late filings.

New client has solo-k for 15 years, didn't realize he needed to be filing returns once his assets exceeded $250K. He thought all was well, until he tried to transfer his plan to a new custodian. He has hired employees and wanted to allow the employees to participate in the plan and thought the new bundled provider would be a better fit for that. Provider says whoa.. wait a minute...we cant take your plan (at least not like this). You need a TPA. So here we are...another solo-k gone wild. Unbeknownst to the client, his employees current and past are already eligible for the plan because the solo-k has immediate eligibility (and immediate vesting). So he's looking at some missed deferral opportunities, some top heavy failures, some failed ADP issues. Not to mention his plan document has not been amended or restated since it was initially adopted with that cute little account application/adoption agreement...and he needs 15 years of 5500 filings to be completed. So my question for today is: part of his filings should have been EZ filings and part of his filings (after adding employees) should have been SF filings. Would you file all the late filings as SF filings under the DFVCP because he now meets title I of ERISA. Or, should the years where he was truly a solo-k be filed on an EZ through the IRS's penalty relief program?

Recently took over administration on a plan and discovered there is a participant that passed away in 2020 with an outstanding loan balance that was never offset. Would you offset the loan current date and issue a 2025 Form 1099-R f to the participant's estate?

Thank you!

I'm sure this has been asked already and I have probably missed it. Does the "small" plan status also extend to deposit timing rules with the new 2023 DOL change to the participant counting methodology? I have a client with 1,000 plus eligible plan participants but less than one hundred participants with account balances, so are they a small plan with regard to the deposit timing rules?

Non profit sponsoring a 401(k) plan had a status change and is now a church organization. Does this make the existing 401(k) plan a "church plan" effective with that status change? Should their 5500 filings cease unless they make an election? Is there a time frame by when the election must be made after the status change? Any advantages to becoming an electing church plan?