Single-Participant 401(k) Plan - 5500 Filing
Posted 29 June 2004 - 09:27 AM
Posted 29 June 2004 - 09:43 AM
A Solo K plan is in actuality a regular qualified plan and enjoys all the benefits under ERISA.... no difference in the kind of doc. I use my regular doc and simply tailer the choices to the client's desires (eligibility, vesting, etc.). Maybe some larger institutions spent the $ to create a specific document for the Solo client... Not necessary though.
I do stress to the client that once an employee is hired, that employee is eligible to be apart of the plan just like the sponsor. As long as the eligibility requirements are met by any employee, that qualifying employee must be allowed to enter the plan... cannot discriminate.
Posted 29 June 2004 - 11:24 AM
Also, you may need to file a 5500 or 5500-EZ even if the plan assets are less than $100,000 -- for example, if it is the final plan year, or if the employer is a member of a controlled group.
Posted 29 June 2004 - 11:36 AM
Posted 29 June 2004 - 02:38 PM
Posted 29 June 2004 - 02:47 PM
No. Providing the SEP is a prototype or individually designed SEP .
Assuming you're exempt from filing (and the employer squeeks when they walk); a way to delay hitting the $100,000 threshold is to deposit only salary deferrals to the 401K and the employer discretionary to a SEP. Anybody see a rpoblem with this?
A 5305-SEP cannot be used in tandem with another plan
Posted 29 June 2004 - 03:22 PM
Edited by PATA, 29 June 2004 - 03:23 PM.
Posted 29 June 2004 - 03:53 PM
By definition, a prototype SEP is not a qualified plan --- as you know, qualified plans are defined under 401(a), while a SEP is defined under 408(k)…
Generally, SEPs are exempted from filing 5500
Posted 29 June 2004 - 04:05 PM
You can have a qualified plan paired with a SEP if the SEP document is a prototype SEP. Contributions (within limitations) can be made to both under this scenario.
An approved IRA custodian/trustee may submit it's own SEP IRA document to the IRS for approval. It's still a SEP IRA - it does not become a qualified plan merely because it was individually approved by the IRS.
You do not aggregate the market value of the SEP IRA with the qualified plan for purposes of determining asset values for the 5500 reporting threshold.