How to proceed when distributions taken but not allowed

[Guest FLALADY]

I am a TPA for a defined benefit plan that has only a husband and wife (owners and trustees of the plan) as participants. Well, apparently in 2005 they decided that they would take all but $134 out of the plan, unbeknownst to me of course. No termination paperwork was completed. No withholding was done. No 1099s were done. At this point, how do I even proceed?

[JanetM]

Run and hide? These folks have a problem. Write up a nice little memo listing the issues that need to be corrected. Plan termination, distributions, and all that stuff. Offer services to fix all that is broke. Send it to them and wait and see. If they send you back reply that they are just going to let the issue go, you have CYA letter.

Is going to be plan sponsor not you to take the heat.