Delay in transferring assets from an orphaned SDA

[mwagner003]

An employee has a self-directed account (SDA) as part of his company's 401k plan. In March of 2015, the employer changes 401k plan providers (moving to a PEO) and the employee is supposed to transfer the assets out of the SDA account into the new plan. The employee fails to transfer the assets into the new plan for over a year, but never takes any distributions from the SDA account during that time.

What are the consequences, if any, of leaving those funds in the orphaned SDA account for so long? Can he still transfer the assets into the new plan after over a year without penalty?

[Lou S.]

Did the prior plan terminate?

Was a final return filed even though there are still assets in the trust?

Why was the transfer initiation left up to the participant and not done by the trustee's of the company 401(k) plan?

[BG5150]

Or was this one of the Trustees' accounts? Or another HCE?