Common problem?

[Tinman]

I'm newer to the MEP/PEP space, but I'm seeing this happening constantly - wondered how common it is and what people normally do.

An adopter moves from one PEO MEP (MEP A) to another (MEP B), effective 4/1/26.  They had changed their PEO provider in November 2025 so had to make the switch.

Their new PEO provider continued employee deferral withholding during the interim move from MEP A to MEP B.  With the effective date of the adoption with MEP B not being until 4/1, these deferrals were sent MEP A to be deposited into employee accounts.  MEP A would not accept these contributions, so the PEO has just been holding on to these contributions for months.

My thought is that they would need to return the deferrals withheld between November and the effective date of the adoption into MEP B - is there any other alternative?