Bird

I don't think there is specific guidance as this probably wasn't contemplated. But I don't see anything preventing it.

If I were in your shoes I'd probably throw up my hands and say it's FUBAR'd and they can either cross their fingers and hope it's not reviewed, or hope they could explain to an auditor that the end result is what would have happened if they documentation had been done properly, as a merger. That's not to say there isn't some potential disastrous, or at least really bad, consequences, such as a careful auditor insisting that the SH contribution by the new company isn't that at all; it is profit sharing or whatever, and the old company still owes the SH. Fixing the 1099-Rs would be down on my worry list. I'd think the "best" actual fix would be to retroactively change it to a merger instead of a termination. I don't really know if that can be done through VCP. Just make it abundantly clear that ADP screwed it up, and royally, and should pay for the fixes and/or assume responsibility for future problems.

After tax and Roth are not the same. I'm not aware of anything that permits you to put after tax money into a Roth IRA. Interesting though, hard to believe that someone who took the time to make after tax contributions is not responsive.

yes that

I disagree that you would have to deposit contributions before the term date. I don't see any problem with terminating a plan 12/31/20 and making PS or match contributions in 2021. And certainly (?!) there is no problem with depositing deferrals after the term date if they were withheld before the term date. And for the triple play of being argumentative, it is pay dates, not compensation earned dates, that matter.

IMO the answer is no...but I don't think anyone, including the IRS, would care. If they wanted to accept those contributions they should have made the term date 9/9. And still could change the term date.

I generally ask if they are paying self-employment taxes on that income. If so it should be fair game. It's mildly eyebrow-raising that they would be getting both a 1099 and a K-1 from the same employer.

One of my first steps would be to ask to see how the existing account is titled. Expect the worst - could be "...IRA." If it is "XYZ investment company, custodian for ABC 401(k)" then odds are there is a document and the advisor just doesn't know it or doesn't know where to find it.

I'd lean towards this. Assuming they were notified of the pending cash-outs.

I don't think you need to amend the comp definition, if that's what you're asking. Just increase the contributions using an -11g amendment.

Resurrecting an old thread...I thought the initial failure to adopt a plan is NOT fixable under VCP?

I agree with Mike, don't appease. We either had that nonsensical answer or I read about it here. Honestly if the letter is what I think it is there is a place to indicate that the return was in fact filed but with a different TIN; complete that section and it should go away.

There is no basis for a return of contributions, or transfer. "I changed my mind" is not a mistake of fact. If the contribution was made in 2021, then just say 17100 was for 2020 and the rest for 2021. Schwab may or may not reflect that in their records, but those records (IMO) are unofficial and simply a convenience for their clients to keep track of things. If the contribution was made in 2020 I think you are stuck with a nondeductible contribution...actually I think it is worse than that, you simply can't max the DB contribution.

Is there any way this does not default in 2021? If not, I don't think I'd worry too much.

I'd say it would depend on the way the loan payments were set up. If (apparently correctly) they were set up as being due early each month, then I agree with the above. If they were set up with due dates at the end of each month, then the failure on the 12/31 payment would trigger a default on 3/31.

Agreed Agreed. It was discussed recently here and would be one of the (rare in my experience) times when liabilities are truly and completely transferred to an insurance company.

Wow I would have loved to have heard that sales pitch. "You should turn your plan account into an annuity which will then be deposited back to the plan. We are both stupid enough to make this happen!" I think the insurance company is probably right. I don't think the owner can be changed, but it might be possible to change the annuitant to the individual instead of the plan.

We saw this too, recently. The embezzler still went to jail for a while.

I don't think they ever said not to include fmv on the 5500. There is some confusing (to me) language in the instructions about "insurance contracts" that I finally figured out meant insurance or annuity contracts where the insurer is providing/guaranteeing the benefits. So if, say, you bought an immediate annuity paying monthly benefits, that is no longer an asset. Not including "regular" insurance values is illogical - how do you get it "out" of the assets, as an expense? And what if it is surrendered, how does it come back "in" - as a gain? (I've never done a 412(i) plan and never hope to and have no idea if that reporting is different.) Yet I've seen very experienced administrators showing premiums as expenses and not including values.

Also keep in mind that timing of distributions is a protected benefit, so for existing participants you can't change it from, say, immediate to a One Year Break.

Not to argue but note that C. B. Zeller said... ...so it seems not to be a compliance check. I don't think I'd do anything except as suggested by Bob the Swimmer, make a note to the file.

Without researching, I'm not aware of any restrictions on terminated participants repaying CARES distribution to a plan. Your question really revolves around system limitations and should be addressed to the recordkeeper. Or take the easy way out and "flip" the status back to "A" or whatever it takes and then back to T if that suits your fancy. We generally don't update status to terminated until it is time to pay out for reasons such as this.

We haven't seen this, at least not recently or that I can recall. Pretty annoying, especially when it is two years after the filing.

It's not a question of how it should be, it's a question of what actually happened.

Was it terminated (and presumably balances voluntarily moved to plan B) or was it merged? Your description has a contradiction in it. If it was merged then I'd say no doubt Plan B can accept the contribution. If it was terminated then the proper thing to do would be to re-open the plan and give everyone the option of what to do with their (new) money. (Not speaking to other potential issues if it was terminated.) Although practically it probably makes sense to just deposit the contribution to Plan B, but definitely make that someone else's liability/problem by explaining that it isn't "right."