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Traditional 401(k) converts to Simple 401(k).


Guest Paul McDonald
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Guest Paul McDonald

The plan is still a 401(k) plan so it still files the form 5500 as a continuing plan. By your message, all you did was adopt the SIMPLE provisions to your plan. Adding the SIMPLE provisions does not terminate the 401(k) plan so there is no need for a final 5500 return. The plan is still on-going, still has the same plan number, etc. If you fail to comply with the SIMPLE rules added to the plan, your document still treats you as a 401(k) plan and you are then subject to the ADP test rules you seek to avoid by adopting the SIMPLE provisions. If you actually terminated the 401(k) and adopted a SIMPLE IRA plan, the answer would be different.

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A client changed from a traditional 401(k) to a Simple 401(k). What do we do about filing F5500. The last F5500 filed (12/31/98) was for the regular 401(k). Now that the plan is a Simple, do we file a final F5500 for the traditional 401(k)and an initial F5500 for the Simple?

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