401K PLAN - incorrectly/involuntarily terminated

Hi all

Sponsor wants to terminate the services of the vendor (or provider/platform) and wants to move another one.

By mistake, tells them to terminate the plan i/o telling them that their services are terminated and assets to be transferred to another vendor (not well informed nor was contacted by anyone - you get you pay for).

Vendor terminated the plan in April 2019 but assets still not distributed - I believe the sponsor signed a resolution for the plan termination rather than contract termination. Can the sponsor still undo the termination with no issues as to the continuance of the plan? It is a 1 year old plan. any other corrective measures that will be required? No idea about what happened to the deferrals, just finding out the facts.

Vendor also tells the client, even if they move the assets to another vendor/platform, they will get a 1099R?? How is this possible there is no distribution?

Your comments are appreciated as well as any insights.

Thank you

I think it can be "un"-terminated.  Apparently no actions have been taken to consummate the termination, if I can phrase it that way...just adopt a reso saying the prior reso is rescinded.  Of course all activity in the interim is subject to review.

Of course there are no 1099s if it is moved.  Unless the vendor screws up (or the person(s) communicating with the vendor), which seems possible.

Although if someone was made 100% vested with the termination resolution I see no way to undo that part.  

12 minutes ago, ESOP Guy said:

Although if someone was made 100% vested with the termination resolution I see no way to undo that part.  

Agreed.  A damned righteous consequence for incompetence.

I suggest double checking the facts with the sponsor.  If a proper termination amendment was not signed by an authorized party, then there was no plan termination. The plan exists until terminated in the manner specified in the plan document.  The vendor is talking rubbish if they claim they have to issue 1099s. The plan exists unless and until properly terminated.