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Hey! I have an Owners' (k) document :-) LOL The adoption agreement is only 6 pages (a plus), but you are constantly reminding the owner that as soon as you hire another employee AND they become eligible for the plan, then you're required to move to a full document. It IS another thing to monitor in order to prevent an automatic failure upon another employee becoming eligible. It's always good to have it amended to a full fledged document prior to the new employee becoming eligible. BTW, I cannot speak for anyone else, but I enjoy how often we go beyond merely answering the question being asked and offer insight into every related issue as well :-) That has to be worth something. Good Luck!

No, you cannot rely on the 15th day of the month following for a timely deposit, no matter what size you are. The deposit of participant contributions must be made on the earliest date on which such contributions or repayments can reasonably be segregated from the employer's general assets. (§2510.3-102 (a)(1)) This means, plain and simple, that you have to make the deposit as soon as you are able. In most cases this will mean the same day it is withheld from the employee’s paycheck. There can sometimes be legitimate reasons why the deposit cannot take place on the same day or maybe the day after. In those cases, a facts and circumstances test will determine whether the delay was reasonable and the deposit couldn’t have been made earlier than it was. There is an “outside window” or maximum time period for making deposits. This maximum time period is the 15th day of the month following separation from the employee’s paycheck. This does not mean that as long as you make it by the 15th of the month following you are ok. It means that even if a tornado swept up your HR person and dropped them on the yellow brick road, the deposit will never be timely if made after the 15th of the month following. The exact language is You are stuck with late deposits that you now need to correct. Don’t panic though, the correction is a fairly straight forward process. You calculate the lost earnings owed to the participants, pay a small excise tax, and possibly file with the DOL. A good practitioner will be able to do this for you for a reasonable fee. Does your plan attach an audit with it’s Form 5500? If so, I can guarantee you that the independent auditor will not sign off on the audit without correction.

Just another piece of info not exactly pertaining to the question. Should the daughter meet the 1000 hour requirement, then the Form 5500 being filed will NOT be a 5500EZ. In this case, the plan will become subject to Title I of ERISA. Conversely, should it be a spouse that works 1000 hours and enters the plan (and not a child of the owner), then the plan will continue to be treated as a one person plan. It's just helpful to reiterate the requirements for filing the forms in order to alleviate any confusion. Good Luck!

"Solo-K" is purely a colloquial term, usually used for marketing purposes. But to answer your question, if only the sole owner has satisfied eligibility requirements, then it is a "one person" plan for purposes of the 5500 filing requirements.

Thanks for your hard work keeping this board up and running. It truly is very helpful to many!

Hey! I have an Owners' (k) document :-) LOL The adoption agreement is only 6 pages (a plus), but you are constantly reminding the owner that as soon as you hire another employee AND they become eligible for the plan, then you're required to move to a full document. It IS another thing to monitor in order to prevent an automatic failure upon another employee becoming eligible. It's always good to have it amended to a full fledged document prior to the new employee becoming eligible. BTW, I cannot speak for anyone else, but I enjoy how often we go beyond merely answering the question being asked and offer insight into every related issue as well :-) That has to be worth something. Good Luck! The conversations and tangents are what makes this forum so great. I can easily look something up in the EOB or "who is the Employer", but when I do I am focused on that one thing, so to have someone else bring up a related issue I hadn't considered yet is invaluable As for the Owners (k) document, I wouldn't worry about your clients since you are a professional in this space and I know that you know what to look for and what to look out for. My concern are those people who are tossed a blank solo K adoption agreement from investment firm XYZ... I see the appeal of a super short adoption agreement. We only do one participant plans when a provider we work with needs it as a favor, so in those cases I simply use a full volume submitter and move on.

Agreed! Great information provided - and appreciated!!!

Belgarath is of course correct. I have seen some financial institutions actually draft their "special solo-k document" to only allow for one participant plans. I always shake my head when I see it since you now add a document failure for what could have been addressed by simply not filing as a one participant plan.

FWIW - I checked with an ERISA attorney on this, who agreed with me.

well, I would think it has to apply. so you look at each plan separately under its own terms, or at least that is how I think it operates.

agree that there is no such thing as a "1099 employee" -- either a w-2 employee or an independent contractor getting a 1099. And agree that those laws need to be followed carefully. If his job isn't truly changing and he's not going to also work in competing positions/doing work for other clients, it's going to be hard to argue that he shouldn't be classified as an employee.