RatherBeGolfing

H-4 status allows you to apply for EAD. EAD allows you to get an SSN (the card will say only valid with work authorization or something similar).

Everyone's situation is different, so how they handle these situations may be different. What does your service agreement say? Regardless of the above, don't make your client's problem your problem.

Ah that makes more sense. The answer to your question on final testing is... It depends. From your description, the spun off plan will not accept ongoing contributions, it is created just to facilitate the distribution of assets. I would structure the spinoff documentation in such a way that the "new plan" terminates on inception, there is no activity other than the transfer in and distributions. Final testing would happen in the PEP, transfer assets to the spin off plan, and finally distribute the assets. For 5500 purposes, the PEP reports the transfer out, and the spin off plan reports the distributions.

Yea the SEP part of the question doesn't make sense OP, can you expand on that? Generally speaking, ceasing participation in a MEP/PEP is not a distributable event. A participating Employer / Adopting Employer cannot terminate the MEP/PEP, or their portion of the MEP/PEP. You can spin off your portion of the MEP/PEP though. Your starting point should be to speak with the MEP/PEP provider. They should have information for you.

I agree, your 5500 should reflect the contributions, not the deposits. I would book the earnings in the year of correction. Otherwise you would need to split earnings over both years to be accurate, and I just don't see the point. Just be consistent.

Agreed. Let the referring party know that what they need is an ERISA atty, and that you would be happy to take it on once corrected.

Then no issues with using the forfeiture. In fact, you would probably create an issue if you don't use the forfeiture when available.

You didn't bring it up, but no issues with partial plan term, right? Asking since "this was the only non-key participant"... Assuming forfeiture was proper, I don't see a problem using it to fund the THM.

I'd also add that it was taxable when available to them; they can't escape that by not cashing the check (constructive receipt)

We have had an issue or two with 5500s in FTW over the last couple of months, but nothing that lasted more than 30 minutes to an hour.

No, we haven't had any problems (FTW users), but we file directly, not on behalf of the sponsor with a signed copy. How you file shouldn't matter though, SSL handshake is client/server issue, so its a Datair/EFAST issue. No comment from Datair on this?

@Peter Gulia I think its more nuanced than that. The OP states that if the account balance is less than the distribution fee, the account is forfeited. So its not that the distribution fee results in no net payment, the balance is forfeited instead of being consumed by the distribution fee. I share @BG5150 concern here.

As far as I'm aware, this is not an option. It wouldn't pass edit checks since the IRS logic looks for $0 in EOY assets and no participants at the end of the year for a final 5500.

Does it already allow for elective deferrals or is it just PS at this time?

I have always filed using third party software, which produces an AckID for Form 5558 filings. I would still start with EFAST, but be prepared to have to go to the Office of the Chief Accountant.