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SIMPLE to SH 401k - back to SIMPLE?


Spencer
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I have an accounting client who seems to have received some bad advice from his financial advisor. He had a SIMPLE plan for a few years. His advisor recommended moving to a SH 401k. He only has 4 employees and he does not defer the maximum. He was not informed of the Form 5500 filing requirement. So now he has to go through DFVCP and file future forms. Can he terminate the SH 401k and just go back to a SIMPLE plan?

Thanks!

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  • 2 months later...

Yes, the employer may reestablish a SIMPLE-IRA plan, but no sooner than the calendar year following the termination of the qualified plan. [see IRC 408(p)(2)(D), Arrangement May Be Only Plan Of Employer]

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