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5500 / ERISA to Non-ERISA Plan


austin3515

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I thought some people had question whether a plan subject to ERISA can ever turn back and be non-ERISA.  Has that been thoroughly debunked?

The instructions say this, and this plan meets this definition:

A “one-participant plan” is: (1) a pension benefit plan that covers only an individual or an individual and his or her spouse who wholly own a trade or business, whether incorporated or unincorporated; or (2) a pension benefit plan for a partnership that covers only the partners or the partners and the partners’ spouses. Thus, a “oneparticipant plan” can cover more than one participant. On the other hand, merely covering only one participant does not make you eligible to file as a “one-participant plan” unless you are one of the types of plans described above.

Austin Powers, CPA, QPA, ERPA

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20 minutes ago, austin3515 said:

I thought some people had question whether a plan subject to ERISA can ever turn back and be non-ERISA.  Has that been thoroughly debunked?

The instructions say this, and this plan meets this definition:

A “one-participant plan” is: (1) a pension benefit plan that covers only an individual or an individual and his or her spouse who wholly own a trade or business, whether incorporated or unincorporated; or (2) a pension benefit plan for a partnership that covers only the partners or the partners and the partners’ spouses. Thus, a “oneparticipant plan” can cover more than one participant. On the other hand, merely covering only one participant does not make you eligible to file as a “one-participant plan” unless you are one of the types of plans described above.

It did cover an employee in 2017 though, so how would it meet the definition of a "one-participant plan"?

 

 

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A few years ago, I did this.  Was filing a Form 5500-SF  for sole prop plus 1 employee.  Employee terminated, so in the following year (and future years), the Form 5500-SF was checked as a one-participant plan.  Haven't had any questions.

Option was to switch to a 5500-EZ, but thought that continuing with electronic filing using 5500-SF as one-participant plan would minimize/eliminate any questions.

And as a confirmation with respect to public disclosure, I went to look on DOL/EFAST for the filing, and the one-participant 5500-SF did not show up... while prior years 5500-SF's continued to show up.  All future one-participant 5500-SF's also do not show up.

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