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hmmm, i would answer "we need guidance". 1. We know that we can cease a SH plan mid year. 2. We know that we can adopt SH provision up to 12/1 @ 3%, later @ 4% NEC. 3. We know that we CAN'T switch from SH match to SH NEC. But i don't think we know that we can't do 1. and 2. in the same year.

Just curious, is this something the recordkeeper wants to do or is this something the Individual Solo K plans are requested? I would think that the custodial agreement would determine if this could be done or not. Also, this sounds like a recordkeeper's nightmare.

I'll take a stab at it, and I could be wrong... If its a plan expense account, it is a plan asset because it is for the benefit of that plan rather than revenue sharing deposited into a service providers operating account. As a plan asset, it is subject to the qualification requirement that all funds are allocated to participants based on definite plan formula. This requirement then means that funds cannot carryover unallocated from year to year (same reasoning as the plan forfeitures). So it goes back to the Code.

TBH I missed that "unrelated" part. Problem with old eyes reading a forum message on a mobile device early in the morning. So if they are truly unrelated, then yes one person could participate in a one company's SEP and the other unrelated company's qualified plan(s). I will edit my other reply to note this. Thanks.

Depends how "unrelated" they are. Even if there is not enough common ownership to create a controlled group under 414(b)-(c), there might still be a controlled group under 415(h).

Your belief is incorrect. EDIT - when I wrote the above I had missed the "unrelated" part. CBZ is correct if truly unrelated for CG, ASG and 415(h) purposes then yes the participant could do this.

For us, virtually never. What happens more often is that within a year or two, someone is cleaning out the house, apartment, garage, etc., and they find a file or a box containing an annual benefit statement, etc. - they then inquire, and most of the time the total distribution took place prior to death so thankfully there is no benefit remaining. But we do primarily small plans.

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