First Year Report (5500)

We set up a 401(k) plan with a 1/1/1999 effective date, first deferral was made in 2020 and according to the TPA, no 5500s have ever been done.

File initial return with all $0?

Was the plan communicated to employees and for 21 years no one elected to defer?  I hope the plan has all of the elections over the years not to defer, or there is the possibility the plan is due 21 years of missed deferral opportunity for each eligible employee!

Is there really a firm out there representing itself as a TPA that let 21 years go by without raising alarms?

The plan sponsor may want to entertain making an argument that with no trust assets, the plan never was fully established.  Dealing with no reporting since 2020 by itself is enough of a nightmare, not to mention all of the missed plan document restatement cycles.

Sorry, I meant 2019, client and broker did not do a good job of communicating.

Only 6 employees in the company, deferrals, if any were sporadic, safe harbor was done on a “maybe” basis.  ADP passed each year as the owner deferred les than those who did defer.

Does one ever show the first year of a plan with $0?

It happens, albeit rarely - maybe if they adopted a PS plan with no deferral option, and then didn't make a first year contribution.  Can't say I've seen it in a plan with a deferral option.

It is possible, but there should be a good explanation.  For example, a 401(k) profit-sharing plan adopted late in the year (deferrals aren't available until the start of the next plan year), and only a profit-sharing contribution is made and it is funded after plan year end.  If the 5500 is done on a cash basis, then the ending balance for the first year would be $0. 

Given the lack of attention to the plan, it would seem very likely that the notices required for the "maybe" safe harbor were mishandled or just not done.

The company needs to have a plan of action not only to file the 2024 5500 on time, but have a plan of action to file all of past due forms asap using DFVCP.  This plan of action would include making sure participants have gotten all allocations of all of the benefits due to them.