The check for 2023 contribution is returned to the client by RK

Hi

Here is a new one for me.

Client just informed me that the RK (no name) returned the 2023 PS contribution to him in January (he just informed me a few days ago).

He sent them the check back in September.

As this is a combo plan, there are 2 issues:

• Deduction was taken for 2023 but deposit was not made
• Gateway/top heavy is not satisfied

Anyone came across a situation like this and what is the correction?

Thanks

Check bounced? Insufficient funds?

Or was it deposited, but perhaps with no allocation instructions, and after getting no response for how to allocate/invest, they sent a check for the trustee to transfer to another trust account for the plan to be held somewhere outside of the R/K platform?

Some other reason?

The reason it was returned may help for guiding them.

It is neither, they confirmed receipt of the wire transfer in but never allocated to the 3 participants, did not inform the plan sponsor of any issues/delays and simply returned the monies in January.

2 hours ago, Jakyasar said:

It is neither, they confirmed receipt of the wire transfer in but never allocated to the 3 participants, did not inform the plan sponsor of any issues/delays and simply returned the monies in January.

So it was a wire and not a check? 
 

This is odd and, while I believe you are saying what you have been told, I don’t believe “did not inform the plan sponsor of any issues/delays” at all. The sponsor is not being upfront OR their spam filter is too tight. 

2 hours ago, Jakyasar said:

It is neither, they confirmed receipt of the wire transfer in but never allocated to the 3 participants, did not inform the plan sponsor of any issues/delays and simply returned the monies in January.

This response does not answer the question: Why?

I am waiting to hear from the RK on the "why".

Trying to get to the bottom of all this and still searching for answers.

Sounds like the record keeper might need to draft a reasonable cause letter to help the employer avoid some nasty consequences.