PLHart

We have a new 401k/PSP plan with an effective date of 1/1/2020, but a special effective date of 11/1/2020 for 401k deferrals and safe harbor (3% non-elective) contribs (it was adopted late in the year), so the 401k & SH provisions were just effective for the last two months of the year (from adoption date forward). Note - the plan will be top-heavy. If the only contribs for the year are the two months of deferrals and the SH 3% will the plan be deemed to satisfy top-heavy minimum? Or will the employer need to top off all employees at 3% of comp for the entire year? We don't know if, as long as the 401k deferrals and SH 3% for 11/1-12/31 are the only plan contribs for the year, if the plan will be deemed to satisfy top-heavy minimums, or if they still need to do 3% top heavy min for entire year since overall the plan has a 1/1/2020 effective date. Our hope is that the entire year TH minimum would only be due only if the employer decided to add any additional profit sharing. IS this correct?

I tend to favor the 'Mistake of Fact' solution since the plan is terminating, although I'm not certain this technically qualifies as such and the custodian (Fidelity) is being a stickler on this. Although it was certainly a mistake made by a confused individual who didn't understand how these things work...

Attorney X had a one-participant profit sharing plan at Fidelity for his one person law firm until he established a partnership with attorney Z on Jan 1 2018. The merged company adopted the plan (as successor employer) of the attorney Z (who is our client) as he already had a cross-tested 401k with a number of employees (all of whom were employed by new partnership). Anyway, attorney X , unaware as to how all this worked, made a $15,000 contribution in May of 2019 to his OLD plan, despite the fact that he had no income from his prior sole proprietorship in 2018 or 2019. A contribution for the new partnership for 2018 is still being determined. Attorney X wants to fix his mistake before rolling over old plan assets to new plan - but I'm not sure what kind of mistake or error this should be classified as in order to determine the proper correction method. Any help greatly appreciated??? Thanks