Transfer of assets equals new plan?

[Spencer]

in 2010, assets transferred from Principal to ADP. ADP established a new plan, filed 2011 5500 with new plan number 002, marked first return, zero beginning assets and showing a transfer to the plan on Sch H line 2l. The Adoption Agreement has an original effective date of 01/01/2010. There were no other changes to the company or the plan. Is there any reason that a new plan should have been started? btw, this is a large plan with an audit required.

The problem now is that a final form 5500 for the original plan 001 was not filed. Client has received an IRS notice inquiring about 2010 return. I don't know if the Principal plan was actually terminated (doubt it). I don't think there are any successor plan issues because there were no distributions to participants.

If I file a final 5500 for the original plan 001, we will have to go through DFVCP and it would cost $2000.

any thoughts on how to fix this?

Thanks!

[QDROphile]

Shame on whoever decided to get involved with ADP. It does not seem like such a smart, money-saving move now, does it? The plan is in for more unforeseen trouble in the future if the butterfly ever flaps its wings. Of couse there was no need to create a new plan. You might try to resolve the matter by addressing it as the documentation mistake that it was rather than a failure to file, as long as the problem is limited to the document formalities and did not adversely affect operations. One problem will be ADP. They will not be either helpful or accommodating if my several experiences with ADP hold true. Consider using the clean up of this mess as an opportunity to move to some other provider at the same time as part of the clean up.

[Spencer]

totally agree on ADP. I am not a fan. We do the audit and had no idea things went down this way until the client received the IRS notice.

Thanks for your comment on treating as documentation mistake.